Economics 9708 · AS & A Level · Externalities

Externalities — practice question

Keynesian and Monetarist economists hold different views about how the economy operates. Which of the following combinations is correct?

  • AKeynesian: decreasing AD will always lead to an increase in economic growth; Monetarist: economic growth is achieved using fiscal policy
  • BKeynesian: increasing AD brings the economy out of recession; Monetarist: the economy always tends to full employment in the long run
  • CKeynesian: increasing AD will always lead to increased employment; Monetarist: economic growth is achieved by cutting taxation
  • DKeynesian: increasing AS brings the economy out of recession; Monetarist: full employment will always be achieved in the long run

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