A Policy Implication of Keynesian Economics Is That

question 25

Multiple Choice

A policy implication of Keynesian economics is that

• A) full employment will always be maintained.
• B) countercyclical policies have no effect on the economy.
• C) constant growth of the money supply is better than discretionary policies.
• D) countercyclical monetary and fiscal policies can be used to achieve full employment.

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Definitions:

Annual Interest

The percentage of interest that will be charged or earned on an investment or loan, calculated on an annual basis.

Coupon Rate

The annual interest rate paid by the issuer of a bond to the bondholder, usually expressed as a percentage of the bond's face value.

Duration

A measure of the sensitivity of the price of a bond or other debt instrument to changes in interest rates.

Shareholders' Equity

The residual interest in the assets of a company after deducting liabilities, representing the ownership stake of shareholders.