Which of the Following Is the Most Likely Cause of Most

question 47

Multiple Choice

Which of the following is the most likely cause of most recessions according to the Keynesian model?

• A)a fall in productivity.
• B)an increase in taxation and government spending.
• C)a fall in expected profits.
• D)a rise in the price of oil.
• E)a fall in the money supply.

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Definitions:

Term Structure

The relationship between interest rates or yields and different terms or maturities for comparable debt instruments.

Interest Rates

The amount charged, expressed as a percentage, by a lender to a borrower for the use of assets.

Nominal Interest Rates

Interest rates that have not been adjusted for inflation, reflecting the rate of interest paid by borrowers or earned by investors.

Pure Discount Securities

Financial instruments that are sold at a discount from their face value and pay no interest until maturity, such as zero-coupon bonds.