Sophisticated Political Economy Keynesian Economics Test - 79+ MCQs: Political Economy - Keynesian Economics Quiz: Test Your Knowledge with Political Science Questions and Answers - Political Economy Keynesian Economics Test

1. What is the impact of Keynesian economics on inflation?

It leads to high inflation

It has no impact on inflation

It leads to low inflation

It depends on other factors

2. What is the role of government spending in Keynesian economics?

To stimulate economic growth and increase aggregate demand

To regulate markets and promote competition

To provide public goods and services

To maintain price stability and control inflation

3. What is the liquidity trap in Keynesian economics?

A situation where interest rates are very high

A situation where interest rates are very low

A situation where inflation is high

A situation where inflation is low

4. What is the concept of 'liquidity trap' in Keynesian economics?

A situation where interest rates are very low and monetary policy becomes ineffective

A condition of high inflation and stagnant economic growth

A state of economic recession with high unemployment rates

A scenario where government spending exceeds tax revenue

5. According to Keynesian economics, what is the cause of unemployment during economic downturns?

Insufficient aggregate demand

Lack of investment

Excessive government intervention

Technological advancements

6. What is the role of the government in Keynesian economics?

To promote free market principles

To regulate interest rates

To manage aggregate demand and stabilize the economy

To reduce income inequality

7. What is the concept of 'countercyclical fiscal policy' in Keynesian economics?

The use of government spending and taxation to offset fluctuations in the business cycle

The impact of changes in interest rates on investment

The effect of changes in consumer confidence on aggregate demand

The influence of changes in exchange rates on international trade

8. According to Keynesian economics, what is the role of government in stabilizing the economy?

Minimal intervention

No intervention

Complete control

Active intervention

9. What is the concept of the paradox of cost in Keynesian economics?

The decrease in production costs due to increased demand

The increase in production costs due to decreased demand

The decrease in production costs due to decreased supply

The increase in production costs due to increased supply

10. What is the role of taxation in Keynesian economics?

To influence consumer spending and redistribute income

To regulate markets and promote competition

To provide public goods and services

To maintain price stability and control inflation

11. What is the Phillips curve in Keynesian economics?

A graphical representation of the inverse relationship between unemployment and inflation

A measure of income inequality in an economy

A theory of international trade

A model of economic growth

12. Who is considered the founder of Keynesian economics?

John Maynard Keynes

Adam Smith

Milton Friedman

Karl Marx

13. What is the concept of 'paradox of thrift' in Keynesian economics?

The idea that individual saving can lead to a decrease in overall economic output

The tendency of consumers to spend more during economic downturns

The impact of changes in interest rates on investment

The effect of changes in consumer confidence on aggregate demand

14. Which of the following is a key component of Keynesian economics?

Laissez-faire capitalism

Supply-side economics

Monetary policy

Demand-side economics

15. How is Keynesian economics relevant in the modern world?

It continues to inform government policies and responses to economic crises

It has been completely replaced by other economic theories

It is no longer applicable due to globalization

It is only relevant in developing countries

16. What is demand-side economics in Keynesian theory?

An approach that focuses on increasing aggregate demand to stimulate economic growth

An approach that emphasizes supply-side policies to boost productivity

An approach that advocates for free markets and limited government intervention

An approach that promotes international trade and globalization

17. What is the concept of aggregate supply in Keynesian economics?

The total demand for goods and services in an economy

The total supply of goods and services in an economy

The total investment in an economy

The total savings in an economy

18. What is the concept of the marginal propensity to save in Keynesian economics?

The proportion of additional income that is spent on consumption

The proportion of additional income that is saved

The proportion of additional income that is invested

The proportion of additional income that is taxed

19. Which of the following is a key component of Keynesian fiscal policy?

Reducing government spending

Increasing taxes

Balancing the budget

Government spending to stimulate demand

20. What is the main focus of Keynesian economics?

Supply-side policies

Monetary policy

Government intervention

Free market principles

Political Economy - Keynesian Economics MCQ Test 4