ECONOMIC POLICY: INFLUENTIAL
THEORIES EXAM 2025 QUESTIONS AND
ANSWERS
Keynes was an avid believer in
X consumer producer✔ government intervention to help solve economic issues.\
Keynes believed that
decreasing✔ increasing aggregate demand could help solve economic problems during a
recession.
Keynes recommended that the government
increaseX lower✔ stop collecting taxes
during economic contraction.
During the Great Depression, Keynes promoted
X contractionary✔ expansionary
actions to encourage economic recovery. - ANS government
increasing
stop collecting taxes
expansionary
1 COPYRIGHT © 2025 SIRJOEL ALL RIGHTS RESERVED
, Hayek is best known for his contribution to the understanding of
price changes.
Hayek disagreed with Keynes about expansionary policy because it could cause ✔ inflation✔
negatively influence consumer decisions.
Unlike Keynes, Hayek believed that consumer actions
✔ could not be accurately displayed on a supply and demand curve. - ANS price changes
inflation
negatively
could not
Milton Friedman helped to establish the economic theory of monetarism.
Which statement best describes the idea of monetarism?
Aggregate supply and demand can only be influenced through fiscal policy.
Changes in consumer behaviors should not be influenced by policy.
Monetary policy is the best way to influence economic growth.
The money supply should not be the determining factor when influencing economic events. -
ANS Monetary policy is the best way to influence economic growth.
2 COPYRIGHT © 2025 SIRJOEL ALL RIGHTS RESERVED
THEORIES EXAM 2025 QUESTIONS AND
ANSWERS
Keynes was an avid believer in
X consumer producer✔ government intervention to help solve economic issues.\
Keynes believed that
decreasing✔ increasing aggregate demand could help solve economic problems during a
recession.
Keynes recommended that the government
increaseX lower✔ stop collecting taxes
during economic contraction.
During the Great Depression, Keynes promoted
X contractionary✔ expansionary
actions to encourage economic recovery. - ANS government
increasing
stop collecting taxes
expansionary
1 COPYRIGHT © 2025 SIRJOEL ALL RIGHTS RESERVED
, Hayek is best known for his contribution to the understanding of
price changes.
Hayek disagreed with Keynes about expansionary policy because it could cause ✔ inflation✔
negatively influence consumer decisions.
Unlike Keynes, Hayek believed that consumer actions
✔ could not be accurately displayed on a supply and demand curve. - ANS price changes
inflation
negatively
could not
Milton Friedman helped to establish the economic theory of monetarism.
Which statement best describes the idea of monetarism?
Aggregate supply and demand can only be influenced through fiscal policy.
Changes in consumer behaviors should not be influenced by policy.
Monetary policy is the best way to influence economic growth.
The money supply should not be the determining factor when influencing economic events. -
ANS Monetary policy is the best way to influence economic growth.
2 COPYRIGHT © 2025 SIRJOEL ALL RIGHTS RESERVED
