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Why was the book principles of economics written?
 
a) To outline how the American economy would be managed in the future.
b) To create and shape modern macroeconomics.
c) To discuss how America could become a successful economy after World War II.
d) To connect the classical and modern economic theories.

                   

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Vaishali Yadav
Vaishali YadavLv10
11 Sep 2020

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Principles of Economics
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Related questions

Question is this -How government intervenes in the economy from three perspectives: Fiscal, Monetary, and Supply Side efforts. You have also now looked at the criticisms of government involvement from the Classical perspective. Which approach makes the most sense to you?

Comment on this answer...

This is Answer-After learning about the classical economic viewpoint and the criticisms of government from it, I don't think there is one single approach that makes the most sense to me between fiscal, monetary, and supply-side policies. I think a minimal mix of the three is okay, and for each, they have their own given situations where they may work best in comparison to the others, or even work in conjunction with one another.

Increasing aggregate demand through fiscal policy may help the economy with unemployment and price levels, or it may hurt the economy instead and leave it in a worse state than it was previously found to be at. This could create artificial demand where there isn't true demand from the consumers. This could trick business and mess them up.

Controlling the supply of money through monetary policy may be helpful to the economy for taming inflation and keeping price stability. Controlling it too much could cause problems such as market unpredictability, which in turn could cause mixed results such as to scare people away or draw them into borrowing less or more money.

Increasing supply through supply-side policies may help the economy with unemployment and price levels. It could hurt people in ways such as people not receiving federal funding, or receive less of it (budget cuts in whatever that may be) due to tax cuts, exemptions, etc., from the government to businesses.

With these three perspectives in mind, I would prefer to see a more classical approach to economic situations. The perspectives of fiscal, monetary, and supply-side policy I think can each be helpful but would be best if they didn't have to be implemented in the first place. They have the potential to cause damage to the economy. After watching the classical economics video and reading the chapter, one thing that stood out to me and I think summarizes government involvement from a classical economists viewpoint is the government's role is like being the umpire in a baseball game. They should make sure everyone plays by the rules and only enters the game as a last resort. That approach makes sense to me.


11. A Keynesian economist would be most likely to agree with whichof the following statements?
A) Government policies do not affect economic activity.
B) Government can implement policy proposals that can positivelyimpact the economy.
C) Most government policies would probably make things worse.
D) The economy ought to be left to market forces.

1. A Classical economist would be most likely to agree with whichof the following statements?
A) Government policies do not affect economic activity.
B) Government can implement policy proposals that can positivelyimpact the economy.
C) Most government policies would probably make things worse.
D) Government intervention in the market is necessary for asmoothly operating economy.

2. What event shifted public opinion away from a laissez-faire viewof government towards a more activist view?
A) World War I.
B) The Great Depression.
C) World War II.
D) The Vietnam War and the social turbulence of the 1960s.

3. Classical economists argued that unemployment during theDepression could be reduced by:
A) eliminating labor unions and government policies that kept wagestoo high.
B) strengthening unions and government regulations protectingunions and workers.
C) increasing real wages so that people are encouraged towork.
D) lowering taxes.


4. The level of income an economy can produce without generatinghigher inflation is called:
A) potential income. B) equilibrium income. C) nominal income. D)real income.

5. Keynes believed equilibrium income __________ potentialincome:
A) always equaled C) was always above
B) was always below D) could be above, below, or equal to

6. The aggregate demand, short-run aggregate supply, and long-runaggregate supply curves are based upon the:
A) principle of substitution.
B) principle of opportunity cost.
C) relationship between a single good and its price.
D) relationship between the price level and total output.

7. For some time now, the U.S. has been pressuring Japan toinstitute policies to improve its weak economy. What effect wouldthese policies have on the U.S.?
A) They would cause the U.S. to move up its aggregate demandcurve.
B) They would cause the U.S. to move down its aggregate demandcurve.
C) They would shift the U.S. aggregate demand curve left.
D) They would shift the U.S. aggregate demand curve right.

8. If companies begin to expect an improvement in the businessclimate, this will cause:
A) a movement down the aggregate demand curve.
B) a movement up the aggregate demand curve.
C) a rightward shift of the aggregate demand curve.
D) a leftward shift of the aggregate demand curve.

9. The effect that a change in the distribution of income has onthe aggregate demand curve is based on the observation that:
A) workers are less likely than stockholders to save the incomethey receive.
B) stockholders are less likely than workers to save the incomethey receive.
C) workers and stockholders are equally likely to save the incomethey receive.
D) the distribution of income is always shifting in favor ofworkers.

10. If total income remains the same but wages fall, the aggregatedemand curve will most likely:
A) shift to the right. B) shift to the left. C) become flatter. D)become steeper.

1/ All the problems studied in economics arise from

a. the unequal distribution of income

b. the scarcity of resources

c. inappropriate government action

d. overpopulation

e. war

 

2/ The overall performance of the economic system as a whole is the focus of

a. macroeconomics

b. public economics

c. international finance

d. labor economics

e. microeconomics

 

3/ After graduating from high school, Steve had the following three choices for his immediate future, listed in order of preference: (1) attend our campus, (2) work in a printed circuit board factory, or (3) attend a rival college. His opportunity cost of going to college here includes which of the following?

a. The income he could have earned at the printed circuit board factory plus the direct cost of attending college here (tuition, textbooks, etc.)

b. The benefits he could have received from going to the rival college.

c. Only the tuition and fees paid for taking classes here.

d. Cannot be determined from the information given.

e. The cost of books and supplies at the rival college.

 

4/ The question of scarce resources and unlimited wants are addressed in

a. psychology

b. history

c. anthropology

d. political science

e. economics

 

5/ Consider an economic model designed to analyze the purchasing decisions of households. An assumption that a household chooses between only two goods would be an example of an

a. positive assumption

b. simplifying assumption

c. macroeconomic assumption

d. financial assumption

e. critical assumption

 

6/ Which of the following explains why economists may disagree over normative issues?

a. They have different beliefs and values.

b. They often employ different statistical techniques when examining data.

c. Some work only on microeconomic issues, while others focus exclusively on macroeconomic issues.

d. They examine the same data to draw their conclusions.

e. They need to disagree to publish their research findings.

 

7/ Suppose your friends take you out for dinner on your birthday, and you have a much better time than you would have had to do anything else. There is still an opportunity cost, even though they will not let you pay for anything. True/False

 

8/ Microeconomics

a. addresses scarcity from a global perspective

b. is purely theoretical and has little value in explaining real-world phenomena

c. focuses on what is happening in the economy as a whole

d. examines how individuals, households, and firms make economic decisions

e. answers the fundamental economic questions of how, when, where, and why.

 

9/ People and organizations have to make choices about how to allocate time and money because

a. religious values conflict with economics

b. time and money are both scarce

c. government require it

d. there are unlimited resources

e. corporations control our lives

 

10/ The objective of an economic model is to

a. yield a better understanding of important relationships

b. use simplifying assumptions to make positive economic statements

c. be an accurate description of reality

d. predict real-world occurrences with complete accuracy

e. use basic principles of economics to derive fundamental assumptions about human behavior.

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