Download ECONOMICS KEYNES VS. HAYEK QUIZ

ECONOMICS KEYNES VS. HAYEK QUIZ
Name: ________________________________________________ Hour: ______________________
1. ________ The field of microeconomics studies
A. The behavior of large regional, national and international corporations or
governments and dealing with their performance, structure, behavior, and
decision making
B. The behavior of individual households and firms in making decisions on the
allocation of limited resources
C. The behavior of individuals through the study of their participation in
experimentally designed games
D. The behavior of politicians in relation to their voting behavior regarding
economics issues
2. ________ The field of macroeconomics studies
A. The behavior of large regional, national and international corporations or
governments and dealing with their performance, structure, behavior, and
decision making
B. The behavior of individual households and firms in making decisions on the
allocation of limited resources
C. The behavior of individuals through the study of their participation in
experimentally designed games
D. The behavior of politicians in relation to their voting behavior regarding
economics issues
3.
________ Which diagram represents the “Boom” and “Bust” cycle of concern to John Keynes
and F.A. Hayek?
A.
B.
C.
D.
4.
________ What is the paradox of thrift according to Keynes?
A. Saving when times are good is a wise policy, because then you have money
to live on when times are bad
B. Saving when times are bad is a wise policy, because then you can stimulate
demand later when times are good
C. Saving when times are bad is poor policy, because then no money is
circulated in to the economy to stimulate demand
D. Saving when times are good is a bad policy because the extra money
circulating in the economy will help stabilize supply, and bring down excess
demand
5.
________ In order to stimulate the economy in a “bust” Keynes recommended
A.
B.
C.
D.
6.
Tax cuts
A reduction in the sale of government bonds
Increased government spending
Decreased government spending
________ What is aggregate demand?
A. The total supply of products available to all Americans in the United States
B. The total demand for all products and services in the United States
C. The total demand for a single product or service by individuals in specific
regions of the United States
D. The total supply of specific products or services in the United States
7.
________ Critics of Keynes stated that his policy in the long run would lead to large
governmental deficits. How did Keynes answer this complaint?
A. The aggregate demand in the long run would stabilize through the
adjustment of monetary and fiscal policies
B. The decrease in the interest rate provided by the central bank would
encourage investment, and thus lead to an increase in aggregate demand
C. In the long run, we are all dead
D. Government spending can be used to increase aggregate demand, thus
increasing economic activity, reduce unemployment, and deflation
8.
________ Keynes believed in what type of economy?
A.
B.
C.
D.
9.
Bottom Up, Mechanical, Cooperative
Bottom Down, Organic, Individualistic
Top Down, Mechanic, Cooperative
Bottom Up, Organic, Individualistic
________ F.A. Hayek believed in what type of economy?
A.
B.
C.
D.
Bottom Up, Mechanical, Cooperative
Bottom Down, Organic, Individualistic
Top Down, Mechanic, Cooperative
Bottom Up, Organic, Individualistic
10. ________F.A. Hayek was from what school of economic thought?
A.
B.
C.
D.
The Chicago School
The German School
The London School
The Paris School
11. ________ According to Hayek, cronyism, or crony capitalism was?
A. The ability of individuals to influence the government through voting
behavior
B. The funneling of government monies to friends and supporters of politicians
controlling its use
C. The funneling of government monies to deserving public projects such as
shovel ready jobs
D. The funneling of government monies to politicians in the form of salary
increases
12. ________ Economists should be most worried at what times according to Hayek?
A. During the “Bust” because aggregate demand is down
B. During the “Boom” because aggregate demand is down
C. During the “Boom” because it is an illusion created by the government
borrowing or printing money and putting it into the economy causing
people to believe there is plenty of money to go around
D. During the “Bust” because it is an illusion created by the overreaction of
producers in creating excess supply and then laying off workers who then
have no income to demand products and therefore increase aggregate
demand
13. ________ Why is full employment not that important to Hayek?
A. Because the government could employ everyone, but they would have no
individual freedom to pursue their own dreams
B. Because the government could employ everyone, but then there would not
be enough tax revenue coming in to pay them all
C. Because the government could employ everyone, but then there would not
be enough of certain items leading to rationing
D. Because the government could employ everyone, leading to an increase in
aggregate demand overall, and a circular flow of money into the economy
14. ________ How would Keynes answer the question, “Should the government attempt to do
what is in the best interests of all, or should individuals guide their own interests
even though many may be hurt?
A. The government should intervene in the economy and attempt to guide it
in order to prevent individuals from suffering during the “Bust” portion of
the business cycle
B. The government should be changed every few years so that average people
have a chance to manage the economy and assist those who have no desire
to work
C. The government should allow individuals their maximum freedom to pursue
their dreams and goals and find the most efficient means in which to help
each other, even though some people may suffer
D. The government should be composed of an elite few that are specifically
trained to manage the economy in order to allow individual freedom to the
extent possible.
15. ________ How would Hayek answer the question, “Should the government attempt to do
what is in the best interests of all, or should individuals guide their own interests
even though many may be hurt?
A. The government should intervene in the economy and attempt to guide it
in order to prevent individuals from suffering during the “Bust” portion of
the business cycle
B. The government should be changed every few years so that average people
have a chance to manage the economy and assist those who have no desire
to work
C. The government should allow individuals their maximum freedom to pursue
their dreams and goals and find the most efficient means in which to help
each other, even though some people may suffer
D. The government should be composed of an elite few that are specifically
trained to manage the economy in order to allow individual freedom to the
extent possible.
EXTRA CREDIT:
WHO IS RIGHT ON THIS ISSUE? _______________________________________________________
A.
B.
C.
D.
F.A. HAYEK
JOHN MAYNARD KEYNES
JOHN MAYNARD HAYEK
F.A. NASH