Modern Economists & Their Big Ideas: Checkpoint 1

Quick checkpoint - five questions on Samuelson, Arrow, Minsky, Stiglitz, Krugman and Deaton.

Question 1 of 5 What is Paul Samuelson known for?

Inventing the stock market Bringing mathematics into economics and writing a best-selling textbook Founding the IMF Studying only Indian agriculture

His Foundations and his Economics textbook shaped modern economics.

Question 2 of 5 Why did Kenneth Arrow say health care markets are different?

Health care is always free Uncertainty and information gaps between doctors and patients There are no doctors Prices never change

His 1963 paper founded health economics.

Question 3 of 5 What did Hyman Minsky mean by "stability is destabilising"?

Calm periods encourage risky borrowing that builds fragility Markets never change Governments should avoid all regulation Inflation is always good

Confidence during booms leads to more debt, eventually causing crises.

Question 4 of 5 Why might banks refuse to lend even to borrowers offering high interest, according to Stiglitz?

Banks dislike profits High rates may attract riskier borrowers Lending is illegal Interest rates are fixed by law

This credit rationing explains why credit can be scarce.

Question 5 of 5 What did Paul Krugman's new trade theory explain?

Why countries never trade Trade between similar countries in similar products Only trade in oil Why tariffs must be high

Economies of scale and love of variety drive intra-industry trade.

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