No Free Lunch: Economics for a Fallen World: Third Edition, Revised

Chapter Seventeen: A Short History of Macroeconomics 440 CHAPTER SEVENTEEN: QUESTIONS FOR REVIEW THE FOLLOWING QUESTIONS ARE TRUE OR FALSE 1. John Maynard Keynes strongly disagreed wtih T.R. Malthus. 2. Keynes used the new tool of aggregate demand to explain the roaring ‘20s. 3. Macroeconomics was always focusing on demand failures since its beginning. 4. J.B. Say would argue that goods trade for money. 5. The Phillips Curve was believed to be a tradeoff between inflation and unemployment that policymakers could exploit. 6. Milton Friedman promoted the Phillips Curve to explain the business cycle. 7. The textbook author likes green beans! (Hint: this one is false) 8. The United States had unemployment >20% during parts of the Great Depression. 9. Keynes thought that labor was more difficult to negotiate with during a recession. 10. The 1970s were characterized by both high unemployment and high inflation, something that was not predicted by the Phillip’s Curve. THE FOLLOWING QUESTION IS SHORT ANSWER 11. Explain the difference between a general glut and a disproportionality in production.