Choose the right answer from the given options and rewrite the sentences. i) Keynesian theory is not based on which of the following assumptions? a) Supply creates its own demand b... Choose the right answer from the given options and rewrite the sentences. i) Keynesian theory is not based on which of the following assumptions? a) Supply creates its own demand b) markets can fall c) Govt. intervention can reduce the impact of recession d) aggregate demand determines national income ii) Which one of the following types of economy deals with the rest of the world? a) Closed economy b) open economy c) developed economy d) None of these iii) National income is a ________ concept. a) Flow concept b) stock concept c) both d) none of these iv) According to Keynes, which of the following is constant in short run? a) aggregate demand b) aggregate supply c) effective demand d) both a & b v) MPC is always _________. a) positive but less than one b) equal to one c) positive but greater than one d) equal to infinity vi) MEC curve __________. a) Slope upwards b) slopes downwards c) remain constant d) none of these
Understand the Problem
The question is asking for the correct answers to a series of economics-related multiple-choice questions based on Keynesian theory and economic concepts. It involves identifying assumptions and definitions related to national income and economic models.
Answer
i) a ii) b iii) a iv) b v) a vi) b
The final answers are: i) a) Supply creates its own demand ii) b) open economy iii) a) Flow concept iv) b) aggregate supply v) a) positive but less than one vi) b) slopes downwards
Answer for screen readers
The final answers are: i) a) Supply creates its own demand ii) b) open economy iii) a) Flow concept iv) b) aggregate supply v) a) positive but less than one vi) b) slopes downwards
More Information
Keynesian economics diverges from classical theory in several ways. For instance, it does not adhere to Say's Law (which states supply creates its own demand), and emphasizes the role of government intervention to mitigate economic downturns.
Tips
Ensure to distinguish between flow and stock concepts accurately in economic contexts. Flow concepts are measured over a period of time whereas stock concepts are measured at one specific point in time.
Sources
- Keynesian Economics: Theory and How It's Used - Investopedia - investopedia.com
- What Is Keynesian Economics? - International Monetary Fund (IMF) - imf.org
- National Income Concepts - Economics Help - economicshelp.org
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