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 supply-side economics in Keynesian theory?

An approach that focuses on reducing government spending and lowering taxes

An approach that emphasizes demand-side policies to boost consumer spending

An approach that advocates for government intervention to regulate markets

An approach that promotes international trade and globalization

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

To promote free market principles

To regulate interest rates

To manage aggregate demand and stabilize the economy

To reduce income inequality

3. What is the paradox of thrift in Keynesian economics?

The idea that increased saving can lead to decreased aggregate demand

The idea that increased government spending can lead to decreased aggregate supply

The idea that increased investment can lead to decreased consumption

The idea that increased taxation can lead to decreased economic growth

4. What is the concept of aggregate demand 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

5. What is the role of monetary policy in Keynesian economics?

To influence borrowing, spending, and investment through manipulation of interest rates

To increase government spending to stimulate economic growth

To reduce income inequality through progressive taxation

To regulate international trade for fair competition

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 multiplier effect in Keynesian economics?

The magnification of initial government spending through increased consumption and investment

The reduction in government spending to control inflation

The increase in taxes to reduce income inequality

The impact of international trade on economic growth

8. What is the role of aggregate demand in Keynesian economics?

To promote economic growth

To regulate interest rates

To manage government spending

To stabilize the economy

9. What is the concept of 'deflationary gap' in Keynesian economics?

A situation where aggregate demand is below the economy's potential output, leading to recession

A combination of high inflation and stagnant economic growth

The impact of changes in interest rates on investment

The effect of changes in consumer confidence on aggregate demand

10. 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

Political Economy - Keynesian Economics MCQ Test 5