ScienceEconomicsEconomic Policy: Influential Theories example #68585
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Economic Policy: Influential Theories

Paulina Mitchell avatar Paulina Mitchell
25 July 2022
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question
Why did Friedrich Hayek call expansionary spending dangerous?
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He felt it could lead to inflation and poor decisions by consumers.
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Which best summarizes the philosophical difference between economists John Maynard Keynes and Adam Smith?
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Keynes said government was the key to solving economic issues, while Smith believed government should take a hands-off approach.
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Milton Friedman led a new economic school of thought called
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monetarism.
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Which best describes how individuals help the economy grow? (diagram about individual affecting economy)
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They work in their own self-interest.
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Milton Friedman argued that consumers are more likely to alter their behavior based on
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long-term changes in the economy.
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John Maynard Keynes believed that governments should increase spending in order to
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increase demand.
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Classical economics played an important role in helping the United States establish
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free enterprise
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What is likely to happen if a new aggregate demand curve moves to the right? (graph of Keynes's theory of aggregate demand)
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Prices and output would rise, and the equilibrium point will change.
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Monetarism plays a role in economic growth by
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influencing the supply of money.
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Which economist most likely would have agreed with the US government's intervention during an economic crisis in 2008?
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John Maynard Keynes