M.C.Q.:

1. In the Simple Keynesian Model, the investment function is:

• Autonomous
• Dependent on the rate of interest
• Dependent on the level of output.
• Dependent on the level of government spending

2 Arthur Okun's notion of the GDP Gap is based on:

• Deductive model-building
• Econometric analysis of time-series data on the U.S. economy.
• The Complete Keynesian Model
• Supply-side economics.

3 Friedman's Natural Rate of Unemployment thesis reinforces:

• The instability of the full-employment level of output.
• The short -run neutrality of money.
• The inability of the government to influence aggregate output in the short-run.
• The long-run neutrality of money.

4 In the Keynesian view, the neo-classical model of output and employment is:

• Based entirely on a quasi-Marxist perspective on surplus value
• Only a special case of his General Theory
• Only based on Say's Law
• Only valid in an open-economy.

5 Supply creates its own demand ' is a statement famously attributed to :

• Jean -Baptiste Say
• John Maynard Keynes
• Alfred Marshall
• Leon Walras

6 The Simple Keynesian Model is characterized by :

• A fixed price level
• A flexible price level
• A perfectly inelastic aggregate supply curve
• An upward sloping aggregate supply curve