The graph shows how individuals affect economic growth. Which best describes how individuals help the economy grow? |
They work in their own self-interest. |
Milton Friedman argued that consumers are more likely to alter their behavior based on |
long-term changes in the economy |
How did Adam Smith's economic ideas help the United States establish a free enterprise system? Check all that apply. |
*they led to freedom of choice for consumers and producers *they led to open competition for consumers *they led to individual ownership of property |
The graph shows an early economic theory known as the "invisible hand." Which best describes the idea behind the "invisible hand"? |
Individuals seeking their own self interest benefit the economy as a whole. |
friedrich hayek believed that |
the economy is too complicated to apply aggregates |
Which best summarizes the philosophical difference between economists John Maynard Keynes and Adam Smith? |
Keynes said government was the key to solving economic issues, while Smith believed government should take a hands-off approach. |
A government might enact expansionary spending when it is trying to |
increase aggregate demand for goods |
Why did Friedrich Hayek call expansionary spending dangerous? |
He felt it could lead to inflation and poor decisions by consumers. |
Monetarism plays a role in economic growth by |
influencing the supply of money |
the General Theory of Employment, Interest and Money was written by |
John Maynard Keynes |
Which occurred during the Great Depression? Check all that apply. |
*falling wages *plummeting growth *surging unemployment |
John Maynard Keynes believed that governments should increase spending in order to |
increase demand |
The graph shows Keynes's theory of aggregate demand. What is likely to happen if a new aggregate demand curve moves to the right? |
prices and output would rise, and the equilibrium point will change |
What are the goals when a government uses expansionary monetary policy? Check all that apply. |
*increasing its money supply to boost the economy *increasing its money supply to speed business expansion |
Milton Friedman led a new economic school of thought called |
monetarism |