_____65. According to Keynesian Theory what factor will ultimately determine the
ID: 1209152 • Letter: #
Question
_____65. According to Keynesian Theory what factor will ultimately determine the level of employment?
income of the employer.
total output of the economy.
total real wage level.
interest rates on investment.
aggregate demand of the economy.
_____66. A Monetarist view of the role of economic activity would be that:
A. the economy will perform adequately if left alone by the
government.
B. is determined primarily by the supply of money.
C. can be manipulated by aggregate demand.
D. that any attempt to decrease or increase activity would be inherently
inflationary.
E. could only be adjusted using fiscal policy.
_____67. Monetarism advocated a Classical belief that real output is determined by
real factors such as:
A. the stock of capital goods.
B. the size and quality of the labor force.
C. the state of technology.
D. all of the above.
E. none of the above are real factors.
Explanation / Answer
65. According to Keynesian Theory what factor will ultimately determine the level of employment?
a) total output of the economy.
66. A Monetarist view of the role of economic activity would be that:
a) is determined primarily by the supply of money.
(Explaianation: monetarism is a school of thought that emphasises the role of governments in controlling the amount of money in circulation. Monetarists believe that variation in the money supply has major influences on national output in the short run)
67. Monetarism advocated a Classical belief that real output is determined by real factors such as:
(a) all of the above
(Explaination: In the long run, the effect of expansion in money supply is primarily on the price level and other nominal variables. In the long run, the level of economic activity in real terms, that is level of real output and employment are determined by the real factors such as stock of capital goods, the state of technology, the size and quality of labour force)
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