Exam 11: Fiscal Policy: the Keynesian View and the Historical Development of Macroeconomics

According to the Keynesian view, if policy makers thought the economy was about to enter an inflationary boom, which of the following would be most appropriate?

When the federal government is running a budget deficit,

Within the Keynesian model, the multiplier effect tends to

If policy makers believe that an inflationary boom is about to begin, the Keynesian view indicates that they should

Within the framework of the Keynesian model,

When an economy is operating well below its full-employment capacity and the marginal propensity to consume is 3/4, a $10 billion increase in investment will cause the equilibrium income to rise by

Within the framework of the Keynesian model, if spending is abnormally low,

Mathematically, the marginal propensity to consume is

According to the Keynesian view, the prolonged unemployment of the Great Depression

The optimal time for the implementation of restrictive fiscal policy would be

During normal times, if the marginal propensity to consumer is 3/4, and the government borrows $10 billion in order to increase spending by that amount, real output will expand by

Which of the following best expresses the central idea of countercyclical fiscal policy?

If Congress votes to increase government purchases and at the same time decrease personal income taxes, they

If the government owes $15.0 trillion and then borrows $900 billion more this year, this leads to

If the economy is experiencing less than full-employment, the Keynesian model recommends that the government

The larger the marginal propensity to consume,

Which of the following would decrease the size of a federal budget deficit?

Keynesian analysis implies that potential output and price stability can be achieved if

Which of the following provides the best information about the direction of the government's fiscal policy?

Which of the following would most likely cause an increase in aggregate demand?