Economic Theories and Government Intervention Quiz
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Questions and Answers

Who spearheaded a revolution in economic thinking during the Great Depression?

  • John Maynard Keynes (correct)
  • Milton Friedman
  • Karl Marx
  • Adam Smith

    • What is the central tenet of the school of thought mentioned in the text?

  • Government intervention can stabilize the economy (correct)
  • Economic collapses are inevitable
  • Free markets always provide full employment
  • Money has no significant role in the economy

    • What was the prevailing idea about free markets before the revolution in economic thinking?

  • Free markets lead to economic collapses
  • Free markets would automatically provide full employment (correct)
  • Workers should demand higher wages for full employment
  • Government intervention is necessary for economic stability

    • What was the main assertion of Keynes's theory?

    <p>Aggregate demand determines economic activity</p> Signup and view all the answers

    What did existing economic theory fail to do during the Great Depression?

    <p>Both A and B</p> Signup and view all the answers

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