Q21 The purpose of the Keynesian analysis is to explain what

Q21. The purpose of the Keynesian analysis is to explain what determines the
   a. size of the labor force
   b. price level
   c. amount of money required in the economy
   d. levels of national income, output, and employment

Q22. Classical economists believed that
   a. the market system always operated at a position of full employment
   b. occasional problems of unemployment could occur but would be quickly eliminated by the system of self-regulating markets
   c. the price level would adjust to balance planned saving with planned investment
   d. the economy had several possible equilibrium output levels

Q23. The size of planned consumption is influenced to a considerable extent by
   a. the interest rate
   b. whether or not the government is running a deficit
   c. how much income people are receiving
   d. expected profits

Q24. Say\'s Law states that
   a. supply is greater than demand
   b. supply is less than demand
   c. demand generates supply
   d. supply generates demand

Q25. According to the classical approach, if planned savings increases,
   a. the rate of interest will rise
   b. the rate of interest will fall
   c. planned investment will fall
   d. planned consumption will increase

Q26. COLA clauses are usually based on the
   a. CPI
   b. PPI
   c. implicit price deflators
   d. level of unemployment

Solution

21

levels of national income, output, and employment

this is the basis of theories proposed by Keynes that how and what factors impact jobs , wages and production