Economist John Maynard Keynes noted one of the main contributors to the Great Depression in the 1930s was:
A. insufficient spending causing below natural rate output.
B. an insufficient agriculture sector, unable to produce enough food for the large US population.
C. poor infrastructure for manufacturing.
D. a labor market that could not meet the demands of the market at the time.
Answer: A
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If Canada has a comparative advantage relative to Mexico in the production of timber, then
A) the opportunity cost of production for timber is lower in Canada than in Mexico. B) the explicit cost of production for timber is lower in Canada than in Mexico. C) the implicit costs of production for timber are higher in Canada than in Mexico. D) the average cost of production for timber is lower in Canada than in Mexico.
Which of the following is not an example of a positive, as opposed to normative, statement?
a. Higher gasoline prices will reduce gasoline consumption. b. Equality is more important than efficiency. c. Trade restrictions lower our standard of living. d. If a nation wants to avoid inflation, it will restrict the growth rate of the quantity of money.
On a graph showing the influence of automatic stabilizers on the economy, government expenditures on transfer payments and real GDP have a(n):
A. direct relationship as shown by an upward-sloping line G. B. direct relationship as shown by a downward-sloping line G. C. inverse relationship as shown by an upward-sloping line G. D. inverse relationship as shown by a downward-sloping line G.
A balance of payments deficit occurs when:
A. exports exceed imports. B. the supply of a nation's currency exceeds the demand for the currency at the current exchange rate. C. the demand for a nation's currency exceeds the supply of the currency at the current exchange rate. D. the supply of a nation's currency is equal to the demand for the currency at the current exchange rate.