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John Maynard Keynes, a seminal figure in 20th-century British economics, is widely recognized as the progenitor of modern macroeconomics.
Answer: True
Explanation: This designation stems from his foundational work in establishing macroeconomics as a distinct field of study, focusing on aggregate economic phenomena and governmental policy interventions.
Keynes's early intellectual development was primarily influenced by his father's work in physics and his mother's career as a politician.
Answer: False
Explanation: While his parents were influential, his father was an economist and logician, and his mother was a social reformer and local politician. His intellectual development was more significantly shaped by his Cambridge education and philosophical influences like G. E. Moore.
Keynes initially pursued a career in philosophy after graduating from Cambridge before turning to economics.
Answer: False
Explanation: Although Keynes had a strong interest in philosophy, particularly G. E. Moore's ideas, his initial post-Cambridge career involved joining the Civil Service in the India Office, before returning to Cambridge to focus on economics.
Which of the following was a key influence on John Maynard Keynes's early intellectual development, particularly regarding philosophy?
Answer: The philosophical ideas of G. E. Moore
Explanation: During his time at Cambridge, Keynes was profoundly influenced by the philosophical ideas of G. E. Moore, which emphasized the intrinsic value of states of mind and aesthetic experiences.
After graduating from Cambridge with a mathematics degree, what was Keynes's initial career path?
Answer: He joined the Civil Service as a clerk in the India Office.
Explanation: Following his graduation from Cambridge in 1904, Keynes entered the Civil Service, taking up a position as a clerk in the India Office in 1906.
Which of the following was a key influence on John Maynard Keynes's early intellectual development, particularly regarding philosophy?
Answer: The philosophical ideas of G. E. Moore
Explanation: During his time at Cambridge, Keynes was profoundly influenced by the philosophical ideas of G. E. Moore, which emphasized the intrinsic value of states of mind and aesthetic experiences.
After graduating from Cambridge with a mathematics degree, what was Keynes's initial career path?
Answer: He joined the Civil Service as a clerk in the India Office.
Explanation: Following his graduation from Cambridge in 1904, Keynes entered the Civil Service, taking up a position as a clerk in the India Office in 1906.
John Maynard Keynes published his first book, 'Indian Currency and Finance,' in 1913, focusing on economic issues in India.
Answer: True
Explanation: Published in 1913, 'Indian Currency and Finance' was indeed Keynes's first book, addressing the economic conditions and currency mechanisms prevalent in India at the time.
Keynes strongly supported the harsh reparations imposed on Germany at the Versailles peace conference, believing they were economically sound.
Answer: False
Explanation: Contrary to this statement, Keynes was a vocal critic of the punitive reparations demanded from Germany at Versailles, arguing they were economically unsustainable and would lead to future instability.
'The Economic Consequences of the Peace,' published in 1919, argued that the reparations imposed on Germany were unsustainable and predicted future conflict.
Answer: True
Explanation: This influential work articulated Keynes's profound concerns regarding the economic and political ramifications of the Treaty of Versailles, specifically highlighting the detrimental impact of excessive reparations.
Keynes consistently advocated for free trade throughout his career, never wavering from this position.
Answer: False
Explanation: While initially a proponent of free trade, Keynes's views evolved, particularly after the Great Depression. He became critical of the strict assumptions of comparative advantage and began advocating for certain protectionist measures to address trade imbalances and stimulate domestic economies.
In 'A Tract on Monetary Reform' (1923), Keynes argued that maintaining the gold standard was the most crucial factor for a country's economic health.
Answer: False
Explanation: In 'A Tract on Monetary Reform,' Keynes argued for prioritizing domestic price stability over strict adherence to the gold standard, suggesting that countries should be willing to allow their currencies to fluctuate to achieve this goal.
Keynes criticized the British government's response to the Great Depression, particularly its implementation of austerity measures.
Answer: True
Explanation: Keynes strongly opposed the prevailing fiscal orthodoxy of austerity during economic downturns, arguing that government spending was essential to counteract recessions and stimulate aggregate demand.
Keynes believed that trade deficits were beneficial for a nation's economy, stimulating domestic growth.
Answer: False
Explanation: Keynes viewed persistent trade deficits as detrimental, arguing they could lead to increased unemployment and slower economic growth. He proposed measures to rebalance trade.
Keynes argued that nations should maintain a diversity of economic activities and a degree of self-sufficiency, moving away from strict adherence to comparative advantage.
Answer: True
Explanation: In his essay 'National Self-Sufficiency,' Keynes questioned the universal applicability of comparative advantage, advocating for national economic diversity and a degree of self-sufficiency, particularly in financial matters.
What was the primary focus of Keynes's first published book in 1913?
Answer: Economic conditions and currency issues in India
Explanation: Keynes's first book, 'Indian Currency and Finance,' published in 1913, examined the specific economic circumstances and monetary systems of India.
What was Keynes's role and stance regarding the reparations imposed on Germany after World War I at the Versailles peace conference?
Answer: He argued against excessively harsh reparations, fearing economic and political destabilization.
Explanation: Keynes, representing the Treasury at Versailles, strongly opposed the punitive reparations demanded of Germany, foreseeing that they would destabilize the German economy and jeopardize European peace.
Which influential book by Keynes argued that the Treaty of Versailles imposed unsustainable reparations on Germany and predicted future conflict?
Answer: The Economic Consequences of the Peace
Explanation: 'The Economic Consequences of the Peace,' published in 1919, is Keynes's seminal critique of the Treaty of Versailles, detailing his arguments against the severity of the reparations imposed on Germany.
Following the 1929 crisis, Keynes's views on international trade shifted significantly. What change occurred?
Answer: He began advocating for protectionist measures to address trade deficits.
Explanation: Post-1929, Keynes grew critical of the assumptions underpinning free trade theory and began advocating for measures, including tariffs, to correct trade deficits and stimulate domestic employment.
Keynes's critique of the theory of comparative advantage centered on:
Answer: Its assumption that labor is perfectly mobile between sectors.
Explanation: Keynes questioned the realism of the comparative advantage theory's assumption of perfect labor mobility between sectors and argued that rigidities in the labor market could undermine the benefits of specialization.
Keynes believed that trade deficits were beneficial for a nation's economy, stimulating domestic growth.
Answer: False
Explanation: Keynes viewed persistent trade deficits as detrimental, arguing they could lead to increased unemployment and slower economic growth. He proposed measures to rebalance trade.
Keynes argued that nations should maintain a diversity of economic activities and a degree of self-sufficiency, moving away from strict adherence to comparative advantage.
Answer: True
Explanation: In his essay 'National Self-Sufficiency,' Keynes questioned the universal applicability of comparative advantage, advocating for national economic diversity and a degree of self-sufficiency, particularly in financial matters.
Keynes's critique of the theory of comparative advantage centered on:
Answer: Its assumption that labor is perfectly mobile between sectors.
Explanation: Keynes questioned the realism of the comparative advantage theory's assumption of perfect labor mobility between sectors and argued that rigidities in the labor market could undermine the benefits of specialization.
Keynes's 1936 magnum opus, 'The General Theory,' argued that aggregate supply, not aggregate demand, was the primary driver of economic activity.
Answer: False
Explanation: Contrary to this statement, 'The General Theory' posited that aggregate demand, rather than aggregate supply, was the principal determinant of the level of economic activity and employment in the short to medium term.
In 'The General Theory,' Keynes challenged the neoclassical belief that free markets automatically ensure full employment in the short run.
Answer: True
Explanation: A central tenet of 'The General Theory' was its critique of the classical assumption that market mechanisms would naturally lead to full employment, arguing instead that insufficient aggregate demand could result in prolonged periods of involuntary unemployment.
Keynes believed government spending during economic downturns should be avoided to maintain balanced budgets.
Answer: False
Explanation: Keynes argued that government spending during recessions was not only permissible but essential to stimulate aggregate demand and counteract economic contraction, even if it resulted in budget deficits.
Keynes believed that psychological factors like confidence and expectations, termed 'animal spirits,' had little impact on economic decisions.
Answer: False
Explanation: Keynes emphasized the significant role of 'animal spirits'—psychological propensities like confidence and expectations—in influencing investment and consumption decisions, thereby impacting aggregate demand.
The 'spending multiplier,' associated with Keynes, suggests that initial spending leads to a proportionally larger increase in economic activity.
Answer: True
Explanation: The concept of the spending multiplier, a key element of Keynesian economics, posits that an initial injection of spending generates a cumulative increase in aggregate economic output that is a multiple of the original expenditure.
What was the central argument of Keynes's magnum opus, 'The General Theory of Employment, Interest and Money' (1936)?
Answer: Aggregate demand is the primary determinant of economic activity and employment levels.
Explanation: 'The General Theory' fundamentally argued that aggregate demand, influenced by consumption and investment, is the primary driver of economic output and employment levels, challenging classical notions of automatic full employment.
How did Keynes challenge the prevailing neoclassical economic thought in 'The General Theory'?
Answer: By highlighting the possibility of prolonged unemployment due to insufficient aggregate demand and 'sticky' prices.
Explanation: Keynes challenged the neoclassical view by demonstrating how 'sticky' wages and prices, coupled with insufficient aggregate demand, could trap economies in states of persistent unemployment, contrary to the assumption of automatic market equilibrium.
What term did Keynes use to describe the psychological factors, such as confidence and expectations, that influence economic behavior?
Answer: Animal spirits
Explanation: Keynes coined the term 'animal spirits' to denote the innate psychological propensities, such as confidence and optimism, that drive economic agents' decisions, particularly in investment.
Which concept, significantly developed by Keynes and R.F. Kahn, explains how an initial injection of spending can lead to a larger increase in overall economic activity?
Answer: The Spending Multiplier
Explanation: The spending multiplier effect, a core concept in Keynesian economics, illustrates how an initial change in spending can result in a magnified change in aggregate economic output.
Keynes believed government spending during economic downturns should be avoided to maintain balanced budgets.
Answer: False
Explanation: Keynes argued that government spending during recessions was not only permissible but essential to stimulate aggregate demand and counteract economic contraction, even if it resulted in budget deficits.
Keynes believed that psychological factors like confidence and expectations, termed 'animal spirits,' had little impact on economic decisions.
Answer: False
Explanation: Keynes emphasized the significant role of 'animal spirits'—psychological propensities like confidence and expectations—in influencing investment and consumption decisions, thereby impacting aggregate demand.
The 'spending multiplier,' associated with Keynes, suggests that initial spending leads to a proportionally larger increase in economic activity.
Answer: True
Explanation: The concept of the spending multiplier, a key element of Keynesian economics, posits that an initial injection of spending generates a cumulative increase in aggregate economic output that is a multiple of the original expenditure.
What was the central argument of Keynes's magnum opus, 'The General Theory of Employment, Interest and Money' (1936)?
Answer: Aggregate demand is the primary determinant of economic activity and employment levels.
Explanation: 'The General Theory' fundamentally argued that aggregate demand, influenced by consumption and investment, is the primary driver of economic output and employment levels, challenging classical notions of automatic full employment.
How did Keynes challenge the prevailing neoclassical economic thought in 'The General Theory'?
Answer: By highlighting the possibility of prolonged unemployment due to insufficient aggregate demand and 'sticky' prices.
Explanation: Keynes challenged the neoclassical view by demonstrating how 'sticky' wages and prices, coupled with insufficient aggregate demand, could trap economies in states of persistent unemployment, contrary to the assumption of automatic market equilibrium.
What term did Keynes use to describe the psychological factors, such as confidence and expectations, that influence economic behavior?
Answer: Animal spirits
Explanation: Keynes coined the term 'animal spirits' to denote the innate psychological propensities, such as confidence and optimism, that drive economic agents' decisions, particularly in investment.
Which concept, significantly developed by Keynes and R.F. Kahn, explains how an initial injection of spending can lead to a larger increase in overall economic activity?
Answer: The Spending Multiplier
Explanation: The spending multiplier effect, a core concept in Keynesian economics, illustrates how an initial change in spending can result in a magnified change in aggregate economic output.
During World War I, Keynes advised the British government on financial matters, including managing credit terms with allies.
Answer: True
Explanation: Keynes served at the Treasury during World War I, providing crucial advice on financial matters, particularly concerning credit arrangements with Allied nations and the acquisition of necessary currencies.
Keynes proposed a global currency called the 'dollar' as part of his plan for the International Clearing Union.
Answer: False
Explanation: Keynes proposed a new international unit of account for his proposed International Clearing Union, which he named the 'bancor,' not the 'dollar'.
Keynes advocated for financing World War II primarily through deficit spending to stimulate the economy.
Answer: False
Explanation: In his work 'How to Pay for the War,' Keynes advocated for financing WWII primarily through increased taxation and compulsory saving, rather than deficit spending, as a measure to control inflation and manage demand.
Keynes believed that managed capitalism, combined with international cooperation, could foster peace.
Answer: True
Explanation: Keynes envisioned that a system of managed capitalism, supported by robust international economic cooperation and stable monetary arrangements, could serve as a foundation for global peace and prosperity.
The 'bancor' was a proposed international reserve currency designed by Keynes to stabilize global trade.
Answer: True
Explanation: The bancor was Keynes's conceptualized international unit of account intended to facilitate global trade and monetary stability within his proposed International Clearing Union framework.
Keynes's proposals for the Bretton Woods system aimed to create a system where countries with large trade surpluses were penalized.
Answer: True
Explanation: Keynes's proposals for international monetary reform included mechanisms designed to discourage persistent trade surpluses, thereby promoting greater balance in global trade and preventing negative externalities on deficit countries.
What was the name of the proposed global currency unit Keynes envisioned for his International Clearing Union?
Answer: The Bancor
Explanation: Keynes proposed the 'bancor' as a unit of international account within his framework for post-war global monetary cooperation, aiming to stabilize exchange rates and facilitate trade.
In 'How to Pay for the War,' what method did Keynes primarily advocate for financing the war effort to prevent inflation?
Answer: Increased taxation and compulsory saving.
Explanation: Keynes's strategy in 'How to Pay for the War' emphasized increased taxation and compulsory saving as the primary means to finance the war effort, thereby dampening inflationary pressures from excess demand.
Which of the following institutions was Keynes instrumental in designing the framework for after World War II?
Answer: The International Monetary Fund (IMF) and the World Bank
Explanation: Keynes played a crucial role in the conceptualization and design of the Bretton Woods institutions, namely the International Monetary Fund (IMF) and the World Bank, established to foster global economic stability and reconstruction.
Keynes's vision for post-WWII international economic institutions, like the IMF and World Bank, aimed to:
Answer: Establish a stable international monetary system and encourage balanced trade.
Explanation: Keynes's proposals for the Bretton Woods system centered on creating a stable international monetary framework and mechanisms to promote balanced trade, thereby fostering global economic cooperation and preventing future conflicts.
The 'bancor' was a proposed international reserve currency designed by Keynes to stabilize global trade.
Answer: True
Explanation: The bancor was Keynes's conceptualized international unit of account intended to facilitate global trade and monetary stability within his proposed International Clearing Union framework.
Keynes's proposals for the Bretton Woods system aimed to create a system where countries with large trade surpluses were penalized.
Answer: True
Explanation: Keynes's proposals for international monetary reform included mechanisms designed to discourage persistent trade surpluses, thereby promoting greater balance in global trade and preventing negative externalities on deficit countries.
What was the name of the proposed global currency unit Keynes envisioned for his International Clearing Union?
Answer: The Bancor
Explanation: Keynes proposed the 'bancor' as a unit of international account within his framework for post-war global monetary cooperation, aiming to stabilize exchange rates and facilitate trade.
In 'How to Pay for the War,' what method did Keynes primarily advocate for financing the war effort to prevent inflation?
Answer: Increased taxation and compulsory saving.
Explanation: Keynes's strategy in 'How to Pay for the War' emphasized increased taxation and compulsory saving as the primary means to finance the war effort, thereby dampening inflationary pressures from excess demand.
Which of the following institutions was Keynes instrumental in designing the framework for after World War II?
Answer: The International Monetary Fund (IMF) and the World Bank
Explanation: Keynes played a crucial role in the conceptualization and design of the Bretton Woods institutions, namely the International Monetary Fund (IMF) and the World Bank, established to foster global economic stability and reconstruction.
Keynes's vision for post-WWII international economic institutions, like the IMF and World Bank, aimed to:
Answer: Establish a stable international monetary system and encourage balanced trade.
Explanation: Keynes's proposals for the Bretton Woods system centered on creating a stable international monetary framework and mechanisms to promote balanced trade, thereby fostering global economic cooperation and preventing future conflicts.
The 'neoclassical synthesis' integrated Keynesian ideas with neoclassical microeconomics, forming the basis of neo-Keynesian economics.
Answer: True
Explanation: The neoclassical synthesis, developed by economists like Hicks and Samuelson, successfully merged Keynes's macroeconomic framework with traditional neoclassical microeconomic principles, establishing neo-Keynesian economics as the dominant paradigm for several decades.
Keynes's influence significantly increased in the 1970s due to the economic challenges of stagflation.
Answer: False
Explanation: The economic challenges of stagflation in the 1970s actually led to a decline in the dominance of Keynesian economics, as critics like Milton Friedman argued that Keynesian policies contributed to inflation and unemployment.
The 2008 financial crisis led to a decline in interest in Keynesian economics, as markets were seen to self-correct.
Answer: False
Explanation: The 2008 financial crisis and subsequent recession prompted a significant resurgence of interest in Keynesian economics, as governments worldwide adopted stimulus measures consistent with Keynesian principles.
Keynesian policies were largely abandoned by developed nations after World War II until the 2008 crisis.
Answer: False
Explanation: Keynesian policies formed the bedrock of mainstream economic management in developed nations from the post-WWII era until the 1970s. While their dominance waned, interest resurged significantly after the 2008 crisis.
Milton Friedman argued that Keynesian fiscal policy was effective in regulating the business cycle, leading to the stagflation of the 1970s.
Answer: False
Explanation: Milton Friedman and monetarists argued that Keynesian fiscal policies were *ineffective* and contributed to economic instability, including the stagflation of the 1970s, by exacerbating inflation.
New Keynesian economics incorporates rational expectations but retains Keynesian assumptions about market failures like price stickiness.
Answer: True
Explanation: New Keynesian economics represents a synthesis that integrates rational expectations from new classical economics with core Keynesian concepts such as price and wage rigidities, which explain market failures and the need for stabilization policies.
Keynes's ideas formed the basis of mainstream macroeconomic thought for decades, often referred to as:
Answer: The Neoclassical Synthesis
Explanation: The integration of Keynesian macroeconomics with neoclassical microeconomics resulted in the 'neoclassical synthesis,' which dominated mainstream economic thought from the mid-20th century until the 1970s.
What economic phenomenon in the 1970s led to a decline in the dominance of Keynesian ideas?
Answer: Stagflation
Explanation: The simultaneous occurrence of high inflation and high unemployment, known as stagflation, challenged the predictive and policy efficacy of traditional Keynesian models, leading to increased influence for alternative schools of thought.
The global financial crisis of 2008 and the subsequent recession led to what reaction regarding Keynesian economics?
Answer: A resurgence of interest and adoption of Keynesian policies.
Explanation: The severity of the 2008 financial crisis and the ensuing recession prompted a significant revival of interest in Keynesian economics, with many governments implementing fiscal stimulus packages aligned with Keynesian principles.
Keynesian policies were largely abandoned by developed nations after World War II until the 2008 crisis.
Answer: False
Explanation: Keynesian policies formed the bedrock of mainstream economic management in developed nations from the post-WWII era until the 1970s. While their dominance waned, interest resurged significantly after the 2008 crisis.
Milton Friedman argued that Keynesian fiscal policy was effective in regulating the business cycle, leading to the stagflation of the 1970s.
Answer: False
Explanation: Milton Friedman and monetarists argued that Keynesian fiscal policies were *ineffective* and contributed to economic instability, including the stagflation of the 1970s, by exacerbating inflation.
New Keynesian economics incorporates rational expectations but retains Keynesian assumptions about market failures like price stickiness.
Answer: True
Explanation: New Keynesian economics represents a synthesis that integrates rational expectations from new classical economics with core Keynesian concepts such as price and wage rigidities, which explain market failures and the need for stabilization policies.
Keynes's ideas formed the basis of mainstream macroeconomic thought for decades, often referred to as:
Answer: The Neoclassical Synthesis
Explanation: The integration of Keynesian macroeconomics with neoclassical microeconomics resulted in the 'neoclassical synthesis,' which dominated mainstream economic thought from the mid-20th century until the 1970s.
What economic phenomenon in the 1970s led to a decline in the dominance of Keynesian ideas?
Answer: Stagflation
Explanation: The simultaneous occurrence of high inflation and high unemployment, known as stagflation, challenged the predictive and policy efficacy of traditional Keynesian models, leading to increased influence for alternative schools of thought.
The global financial crisis of 2008 and the subsequent recession led to what reaction regarding Keynesian economics?
Answer: A resurgence of interest and adoption of Keynesian policies.
Explanation: The severity of the 2008 financial crisis and the ensuing recession prompted a significant revival of interest in Keynesian economics, with many governments implementing fiscal stimulus packages aligned with Keynesian principles.
Keynes viewed unchecked inflation as a minor economic concern compared to deflation.
Answer: False
Explanation: While Keynes was concerned about the negative impacts of deflation on working classes and economic activity, he also recognized the destructive potential of unchecked inflation, citing Lenin's view on currency debasement.
Keynes believed that the primary goal of work should be the accumulation of wealth, not the provision of leisure.
Answer: False
Explanation: Keynes posited that the excessive pursuit of wealth was a 'pathological condition' and that the ultimate aim of work should be to provide leisure, enabling individuals to engage in more fulfilling pursuits.
Keynes was a significant patron of the arts and played a role in establishing the Arts Council of Great Britain.
Answer: True
Explanation: Keynes was deeply involved in the arts, providing substantial financial support to various institutions and playing a pivotal role in the founding of the Arts Council of Great Britain.
Keynes identified as a devout follower of traditional religious doctrines throughout his life.
Answer: False
Explanation: Keynes identified as an agnostic throughout his life, though he later came to appreciate the social and moral functions of religion.
Keynes was a successful investor who managed to recover his fortune after the 1929 stock market crash.
Answer: True
Explanation: Keynes demonstrated considerable skill as an investor, notably rebuilding his substantial fortune after experiencing significant losses during the 1929 stock market crash.
Keynes was a lifelong member of the Conservative Party, advocating for their economic policies.
Answer: False
Explanation: Keynes was a lifelong member of the Liberal Party and was instrumental in shaping its economic policies, though he never sought elected office himself.
Keynes supported eugenics and served as a director of the British Eugenics Society.
Answer: True
Explanation: Keynes was indeed a proponent of eugenics and held a directorship position within the British Eugenics Society for several years.
Keynes's marriage to ballerina Lydia Lopokova provided him with emotional stability.
Answer: True
Explanation: Keynes's marriage to Lydia Lopokova in 1925 is widely described as a source of significant happiness and emotional stability in his life.
Keynes was an advocate for reforming laws against homosexuality and supported women's rights.
Answer: True
Explanation: Keynes actively supported social reforms, including advocating for the revision of laws concerning homosexuality and championing women's rights.
Keynes's investment strategy focused primarily on large, established blue-chip stocks.
Answer: False
Explanation: Keynes's successful investment strategy, particularly for King's College, Cambridge, emphasized stocks of smaller, dividend-paying companies, rather than exclusively large blue-chip stocks.
Friedrich Hayek, a major critic of Keynes, expressed personal admiration for Keynes after his death.
Answer: True
Explanation: Despite their profound theoretical disagreements, Friedrich Hayek held Keynes in high personal regard, famously describing him as 'the one really great man I ever knew, and for whom I had unbounded admiration.'
In his later years, Keynes expressed a renewed appreciation for the role of the 'invisible hand' in economic solutions.
Answer: True
Explanation: Shortly before his death, Keynes reportedly indicated a late-career reconsideration of the 'invisible hand' mechanism, suggesting a nuanced view on the interplay between market forces and policy intervention.
Keynes's critique of Marxism focused on its economic predictions being accurate but its values being flawed.
Answer: False
Explanation: Keynes's critique of Marxism centered on its theoretical foundations, which he deemed based on misunderstandings and obsolete economic theories ('Das Kapital'), rather than its predictive accuracy or value system.
Keynes viewed unchecked inflation as a minor economic concern compared to deflation.
Answer: False
Explanation: While Keynes was concerned about the detrimental effects of deflation, particularly on working-class incomes, he also recognized the severe economic and social consequences of uncontrolled inflation.
Keynes generally preferred mild inflation over deflation because he believed deflation was more harmful to:
Answer: Working-class families
Explanation: Keynes argued that deflationary pressures disproportionately harmed working-class families through unemployment and wage reductions, making mild inflation a preferable alternative, despite its potential to 'disappoint the rentier'.
What was Keynes's view on the purpose of work, contrasting with the pursuit of wealth?
Answer: Work's aim should be to provide leisure and reduce the need for excessive labor.
Explanation: Keynes believed that the ultimate objective of economic activity should be to provide sufficient leisure and reduce the necessity for arduous labor, rather than solely focusing on the accumulation of wealth.
Keynes's personal investment strategy, notably for King's College, Cambridge, involved:
Answer: Concentrating on stocks of smaller, dividend-paying companies.
Explanation: Keynes's investment approach, particularly for King's College, emphasized selecting stocks of smaller companies known for consistent dividend payments, a strategy that proved highly successful.
Which political party was John Maynard Keynes a lifelong member of?
Answer: The Liberal Party
Explanation: John Maynard Keynes was a lifelong member of the Liberal Party in the United Kingdom, actively contributing to its economic policy formulation.
Keynes's views on eugenics included:
Answer: Serving as a director of the British Eugenics Society.
Explanation: Keynes held views supportive of eugenics and served as a director of the British Eugenics Society, considering it a significant field of sociological study.
Keynes's critique of Marxism in 1931 primarily focused on:
Answer: Its foundation on misunderstandings and obsolete theories.
Explanation: In 1931, Keynes characterized Marxism as fundamentally flawed, arguing it was based on an outdated theoretical framework and a misunderstanding of economic principles.
Despite their opposing economic views, how did Friedrich Hayek describe John Maynard Keynes personally?
Answer: As the one truly great man he ever knew, for whom he had unbounded admiration.
Explanation: Friedrich Hayek, a prominent critic of Keynesian economics, expressed profound personal respect for Keynes, referring to him as 'the one truly great man I ever knew, and for whom I had unbounded admiration.'
What was Keynes's stance on the laws against homosexuality during his time?
Answer: He was an outspoken advocate for their reform.
Explanation: Keynes was an advocate for social reform and supported the revision of laws criminalizing homosexual acts, reflecting a progressive stance for his era.
Keynes viewed unchecked inflation as a minor economic concern compared to deflation.
Answer: False
Explanation: While Keynes was concerned about the negative impacts of deflation on working classes and economic activity, he also recognized the destructive potential of unchecked inflation, citing Lenin's view on currency debasement.
Keynes viewed unchecked inflation as a minor economic concern compared to deflation.
Answer: False
Explanation: While Keynes was concerned about the negative impacts of deflation on working classes and economic activity, he also recognized the destructive potential of unchecked inflation, citing Lenin's view on currency debasement.
Keynes believed that the primary goal of work should be the accumulation of wealth, not the provision of leisure.
Answer: False
Explanation: Keynes posited that the excessive pursuit of wealth was a 'pathological condition' and that the ultimate aim of work should be to provide leisure, enabling individuals to engage in more fulfilling pursuits.
Keynes was a significant patron of the arts and played a role in establishing the Arts Council of Great Britain.
Answer: True
Explanation: Keynes was deeply involved in the arts, providing substantial financial support to various institutions and playing a pivotal role in the founding of the Arts Council of Great Britain.
Keynes identified as a devout follower of traditional religious doctrines throughout his life.
Answer: False
Explanation: Keynes identified as an agnostic throughout his life, though he later came to appreciate the social and moral functions of religion.
Keynes was a successful investor who managed to recover his fortune after the 1929 stock market crash.
Answer: True
Explanation: Keynes demonstrated considerable skill as an investor, notably rebuilding his substantial fortune after experiencing significant losses during the 1929 stock market crash.
Keynes was a lifelong member of the Conservative Party, advocating for their economic policies.
Answer: False
Explanation: Keynes was a lifelong member of the Liberal Party and was instrumental in shaping its economic policies, though he never sought elected office himself.
Keynes supported eugenics and served as a director of the British Eugenics Society.
Answer: True
Explanation: Keynes was indeed a proponent of eugenics and held a directorship position within the British Eugenics Society for several years.
Keynes's marriage to ballerina Lydia Lopokova provided him with emotional stability.
Answer: True
Explanation: Keynes's marriage to Lydia Lopokova in 1925 is widely described as a source of significant happiness and emotional stability in his life.
Keynes was an advocate for reforming laws against homosexuality and supported women's rights.
Answer: True
Explanation: Keynes actively supported social reforms, including advocating for the revision of laws concerning homosexuality and championing women's rights.
Keynes's investment strategy focused primarily on large, established blue-chip stocks.
Answer: False
Explanation: Keynes's successful investment strategy, particularly for King's College, Cambridge, emphasized stocks of smaller, dividend-paying companies, rather than exclusively large blue-chip stocks.
Friedrich Hayek, a major critic of Keynes, expressed personal admiration for Keynes after his death.
Answer: True
Explanation: Despite their profound theoretical disagreements, Friedrich Hayek held Keynes in high personal regard, famously describing him as 'the one truly great man I ever knew, and for whom I had unbounded admiration.'
In his later years, Keynes expressed a renewed appreciation for the role of the 'invisible hand' in economic solutions.
Answer: True
Explanation: Shortly before his death, Keynes reportedly indicated a late-career reconsideration of the 'invisible hand' mechanism, suggesting a nuanced view on the interplay between market forces and policy intervention.
Keynes's critique of Marxism focused on its economic predictions being accurate but its values being flawed.
Answer: False
Explanation: Keynes's critique of Marxism centered on its theoretical foundations, which he deemed based on an outdated theoretical framework and a misunderstanding of economic principles ('Das Kapital'), rather than its value system.
Keynes viewed unchecked inflation as a minor economic concern compared to deflation.
Answer: False
Explanation: While Keynes was concerned about the negative impacts of deflation on working classes and economic activity, he also recognized the destructive potential of unchecked inflation, citing Lenin's view on currency debasement.
Keynes generally preferred mild inflation over deflation because he believed deflation was more harmful to:
Answer: Working-class families
Explanation: Keynes argued that deflationary pressures disproportionately harmed working-class families through unemployment and wage reductions, making mild inflation a preferable alternative, despite its potential to 'disappoint the rentier'.
What was Keynes's view on the purpose of work, contrasting with the pursuit of wealth?
Answer: Work's aim should be to provide leisure and reduce the need for excessive labor.
Explanation: Keynes believed that the ultimate objective of economic activity should be to provide sufficient leisure and reduce the necessity for arduous labor, rather than solely focusing on the accumulation of wealth.
Keynes's personal investment strategy, notably for King's College, Cambridge, involved:
Answer: Concentrating on stocks of smaller, dividend-paying companies.
Explanation: Keynes's investment approach, particularly for King's College, emphasized selecting stocks of smaller companies known for consistent dividend payments, a strategy that proved highly successful.
Which political party was John Maynard Keynes a lifelong member of?
Answer: The Liberal Party
Explanation: John Maynard Keynes was a lifelong member of the Liberal Party in the United Kingdom, actively contributing to its economic policy formulation.
Keynes's views on eugenics included:
Answer: Serving as a director of the British Eugenics Society.
Explanation: Keynes held views supportive of eugenics and served as a director of the British Eugenics Society, considering it a significant field of sociological study.
Keynes's critique of Marxism in 1931 primarily focused on:
Answer: Its foundation on misunderstandings and obsolete theories.
Explanation: In 1931, Keynes characterized Marxism as fundamentally flawed, arguing it was based on an outdated theoretical framework and a misunderstanding of economic principles ('Das Kapital').
Despite their opposing economic views, how did Friedrich Hayek describe John Maynard Keynes personally?
Answer: As the one truly great man he ever knew, for whom he had unbounded admiration.
Explanation: Friedrich Hayek, a prominent critic of Keynesian economics, expressed profound personal respect for Keynes, referring to him as 'the one truly great man I ever knew, and for whom I had unbounded admiration.'
What was Keynes's stance on the laws against homosexuality during his time?
Answer: He was an outspoken advocate for their reform.
Explanation: Keynes was an advocate for social reform and supported the revision of laws criminalizing homosexual acts, reflecting a progressive stance for his era.