Register for the upcoming webinar Introducing the New 5th Edition AP Economics Curriculum on August 17th at 5pm ET

Grade 6-8, 9-12

Keynes vs. Classical Tool

Time: 15 mins,
Updated: June 23 2023,

In this economics interactive, users will play a drag and drop interactive to find the difference between Keynesian theory and New Classical theory.

This interactive is adapted from Capstone Unit 6 Lesson 37, “Can Government Manage The National Economy?”  which can be found in the Capstone book or Virtual Economics 5.0.


  • The objective of the app is to correctly place the answers into the corresponding drag areas: Keynesian Theory or New Classical Theory.
  • In the answer bank section, you will find a list of statements related to economics theories.
  • Each statement represents an answer that needs to be placed in the appropriate theory category.
  • To begin, simply click and hold on an answer from the answer bank and drag it to one of the drag areas.
  • Pay attention to the titles of the drag areas: Keynesian Theory and New Classical Theory.
Drag and Drop Activity

Keynes vs. Classical

Recessions and depressions occur because of too little aggregate demand.
Monetary and fiscal policies are generally ineffective in managing the economy.
Government can and should play a positive role in managing the economy.
Monetary and fiscal policies have some short-term effects but have little influence in the long run.
Monetary policy works through interest rates.
Fool me once, shame on you. Fool me twice, shame on me.
Fiscal policy is more effective than monetary policy.
The government that governs least governs best.
Government may not be able to completely control the economy, but it can make it better.
Inflation is caused by the government increasing the money supply by more than 3 to 5 percent a year.
Lowering taxes or increasing government spending affects aggregate demand.
Taxes primarily affect people’s incentives to save, work, and invest.
There is a trade-off between unemployment and inflation.
It is important that government economic policies be clear and consistent.

Keynesian Theory

New Classical Theory

Congratulations! You have successfully completed the activity.