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Unformatted text preview: ons they quit buying anything except what they had
to save to stay alive. This drop in spending threw the stores into trouble, and they quit ordering [new products] and
discharged clerks. When orders stopped the factories shut down, and factory workers had no jobs" This quote
a. the multiplier
b. the Quantity Theory
c. the accelerator d. the Phillips curve
this is the multiplier
12. The Great Depression was a truly momentous time in US history, one where US policy makers turned to the
theories of Keynes for the basis of policies designed to get the US out of the depression. While all of the following
would be theoretically possible policies for getting the economy out of the Great Depression, which was the fiscal
policy favored by Keynes in an environment where both businesses and individuals suffered from a lack of confidence?
a. a tax cut to businesses
b. a reduction in interest rates
c. an increase in the money supply
d. an increase in government spending
Keynes was very clear, he favored fiscal policies that would have a direct affect on AD
13. What can...
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