Keynesian Theory and Policy was a response to:

a) the economic boom years of the period 1922-1929

b) the post WWI recession in the years between 1919 and 1921

c) chronically high unemployment during the Great Depression of the 1930's

d) low unemployment during WWII (1939-1945)

e) the pre-WWI rise in standards of living during the period 1894-1914

In an economy in which the MPC = 0.33, the value of the Multiplier (M) is:

a) 0.33

b) 1.5

c) 0.67

d) 3.33

Which of the following components of AD tends to fluctuate the most? (In terms of a percentage change.)

ac

bx

ci

dg

em

Which of the following policy combinations is most likely to cure a severe recession?

a) Taxes = decrease; Government Spending = decrease

b) Taxes = increase; Government Spending = decrease

c) Taxes = increase; Government Spending = increase

d) Taxes = decrease; Government Spending = increase