John Maynard Keynes Argued That If Many Households Decide at the Same

question 296

Multiple Choice

John Maynard Keynes argued that if many households decide at the same time to increase saving and reduce spending

• A)this will increase investment spending in the short run and expand the economy in the long run.
• B)the economy will benefit in the short run but the effect will not last into the long run.
• C)this will have a major negative impact on the economy in both the short run and in the long run.
• D)they may make themselves worse off by causing aggregate expenditure to fall,thereby pushing the economy into a recession.

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Definitions:

Debt-to-Equity Ratio

It's a ratio that signifies the proportional use of debt and shareholders' equity in the acquisition of company assets.

Total Liabilities

The sum of all financial obligations (debts and other liabilities) that a company owes to outside parties.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, representing the ownership equity spread among individual shareholders.

Coupon Interest Rate

The annual interest rate paid by a bond issuer on the bond's face value, also known as the "coupon rate."