SIE Exam Question 779: Answer and Explanation

Question: 779

Which of the following is correct regarding Keynesian economics?

• A. It is considered a "demand-side" theory that focuses on changes in the economy over the long run.
• B. It is considered a "demand-side" theory that focuses on changes in the economy over the short run.
• C. It is considered a "supply-side" theory that focuses on changes in the economy over the long run.
• D. It is considered a "supply-side" theory that focuses on changes in the economy over the short run.

Correct Answer: B

Explanation:

Keynesian economics is considered a "demand-side" theory that focuses on changes in the economy over the short run.