Economic Theories Quiz: Austrian, Classical, and Keynesian

Economic Theories

• Laissez-faire economic theory emphasizes the importance of free markets, limited government intervention, and individual property rights.
• Keynesian economic theory advocates for government intervention in the economy, especially through fiscal and monetary policies to manage aggregate demand.
• Classical economic theory is based on the idea that the economy is self-regulating and that government intervention should be minimal.
• Monetarist economic theory focuses on the role of money supply in influencing economic outcomes and advocates for central bank control of the money supply.

Government Intervention

• According to Keynesian economists, the role of government in stabilizing the economy is to intervene in times of crisis, such as recessions, to stimulate aggregate demand.
• Austrian economists believe that government intervention in free markets can lead to market distortions and should be limited.

Stocks and Equity

• A stock, also known as equity, is a type of security that represents ownership in a company.
• The main characteristic of a stock or equity is that it represents ownership in a company.
• A stock is a type of security that is considered equity.
• A stockholder, or equity holder, possesses a share of ownership in a company.
• A stock can be described as a type of security that represents ownership in a company and gives the holder a claim on a portion of its assets and profits.