Mini Lecture: Economic Theory

Question 1

The ___________ economist spend his or her time trying to figure out how the economy works.

Answer 1

Theoretical

Question 2

The _________ economist is concerned about policy.

Answer 2

Applied

Question 3

What economist will be thinking about which legislator to contact, how the bill should be written, and who should be targeted?

Answer 3

The policy economist

Question 4

What economist is not concerned about what policy is appropriate but rather is interested in explaining the consequences of policies?

Answer 4

The theoretical economist

Question 5

Neither theory (theoretical economics or applied economics) is totally ____________.

Answer 5

Exclusive

Question 6

With economic theory there are degrees of _____________ to a particular theory.

Answer 6

Commitment

Question 7

The Keynesian theory has come to be know as the what theory?

Answer 7

Demand-side theory

Question 8

The classical theory has come to be known as the what theory?

Answer 8

Supply-side theory

Question 9

The demand-side theory (Keynesian theory) has the demand “_______” the economy along.

Answer 9

Pull

Question 10

The supply-side theory (classical theory) has the supply “________” the economy forward.

Answer 10

Pushing

Question 11

The portion of income spent on goods and services is the __________ ___________ to ___________ (MPC)

Answer 11

Marginal propensity to consume

Question 12

In the Keynesian theory the main point is the what idea?

Answer 12

Multiplier idea

Question 13

The classical theory rule says supply must be increased first and then the __________ will follow.

Answer 13

Demand

Question 14

The classical approach argues that the supply of goods and services must _________ the demand because otherwise the demand will only lead to higher ________.

Answer 14

Precede

Prices