Economic Theories
Instructions: Test your understanding of major economic theories and the thinkers behind them
- 1.
Which economist wrote 'The Wealth of Nations' in 1776, often considered the foundation of modern economics?
AKarl MarxBJohn Maynard KeynesCAdam SmithDDavid Ricardo - 2.
What does the economic concept of 'supply and demand' primarily determine?
AInterest ratesBGovernment budgetsCMarket pricesDTax rates - 3.
Keynesian economics advocates for what during economic downturns?
AEliminating all taxesBReturning to the gold standardCReducing government spendingDIncreased government spending to stimulate demand - 4.
Which economic theory, associated with Milton Friedman, emphasizes controlling the money supply?
AMercantilismBMonetarismCMarxismDFeudalism - 5.
What is 'laissez-faire' economics?
AMinimal government interference in the economyBGovernment ownership of all industryCA system of fixed pricesDHeavy government regulation of markets - 6.
Karl Marx co-authored which famous economic and political pamphlet in 1848?
AOn LibertyBThe Communist ManifestoCDas KapitalDThe Social Contract - 7.
What does GDP stand for?
AGeneral Domestic PriceBGlobal Development PlanCGovernment Debt PaymentDGross Domestic Product - 8.
The concept of 'comparative advantage' in international trade was developed by which economist?
AThomas MalthusBDavid RicardoCAdam SmithDJohn Stuart Mill - 9.
What is inflation?
AA rise in the stock marketBA general increase in prices over timeCA decrease in government spendingDAn increase in unemployment - 10.
Which economic concept describes the idea that people respond to incentives?
ARational choice theoryBFeudal economicsCTrickle-down economicsDMercantilism - 11.
The 'invisible hand' is a metaphor coined by Adam Smith referring to what?
ASelf-regulating nature of the marketplaceBSecret trade agreementsCCorporate conspiraciesDGovernment manipulation of markets - 12.
What economic system features government ownership of the means of production?
AFeudalismBMercantilismCCapitalismDSocialism - 13.
The 'Laffer Curve' illustrates the relationship between tax rates and what?
AGovernment tax revenueBInflationCInterest ratesDUnemployment - 14.
Which economist won the Nobel Prize and was known for his work on free markets and the Chicago School?
APaul KrugmanBJohn Kenneth GalbraithCJoseph StiglitzDMilton Friedman - 15.
What is a 'mixed economy'?
AAn economy that combines private enterprise with government regulationBAn economy based solely on agricultureCAn economy with no governmentDAn economy that only trades with neighboring countries