Keynesian Economists Focus on the Effect That Expectations Have on Prices

question 38

True/False

Keynesian economists focus on the effect that expectations have on prices and wages.

---

Definitions:

Lender Of Last Resort

An institution, usually a country's central bank, that offers loans to banks or other eligible institutions that are experiencing financial difficulty or are considered highly risky.

M1 Money Supply

The total money supply that includes cash and liquid assets that are easily convertible into cash, such as demand deposits.

Monetary Policy

Actions undertaken by a central bank, such as the Federal Reserve, to control the money supply and interest rates to achieve macroeconomic objectives like controlling inflation, consumption, growth, and liquidity.

Federal Open Market Committee

The branch of the Federal Reserve System responsible for setting national monetary policy and interest rates.