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

When Keynesian equilibrium is present,

Prior to the time of John Maynard Keynes, most economists stressed that

Discretionary fiscal policy involves

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

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

The prevailing budget philosophy prior to Keynes called for a balanced budget. Keynes argued that the government should not balance its budget but instead have budget deficits during

According to the Keynesian view, if purchasers buy more goods and services than businesses expect,

How does Keynesian economic theory recommend that fiscal policy be conducted?

If the federal government is running a budget deficit,

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

Which of the following would a Keynesian economist be most likely to stress?

In the Keynesian view, equilibrium takes place when

The major advantage of automatic stabilizers is that they

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?

Keynesian analysis suggests that a planned budget surplus

Keynesian economists believed that the prolonged unemployment of the 1930s was the result of

If the economy is experiencing inflationary boom, and the government lowers taxes in an effort to balance the budget, the Keynesian model indicates the likely effect will be to

According to the Keynesian view, if real GDP is slowing and the economy appears to be headed for a recession, a reduction in tax rates is

Keynesian analysis indicates that an unexpected decline in aggregate demand will lead to

Prior to the Great Depression, most economists believed that a recessionary downturn would be reversed by