Keynesian Economics Quiz
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Questions and Answers

According to Keynesian theory, what does employment depend upon?

  • Effective demand (correct)
  • Consumption demand
  • Aggregate supply
  • Investment demand

    • What determines the aggregate demand function in Keynesian theory?

  • Consumption demand and investment demand (correct)
  • Physical conditions of production
  • Psychology of the people
  • Aggregate supply function

    • How can employment be increased according to Keynesian theory?

  • By stabilizing aggregate supply
  • By reducing income and saving
  • By increasing consumption and/or investment (correct)
  • By decreasing effective demand

    • What does consumption depend on in Keynesian theory?

    <p>Income</p> Signup and view all the answers

    How can consumption be increased in Keynesian theory?

    <p>By raising the propensity to consume</p> Signup and view all the answers

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