How Did the Influential Economist John Maynard Keynes Explain His

question 3

Multiple Choice

How did the influential economist John Maynard Keynes explain his remark that though economics is an easy subject compared with the higher branches of philosophy or pure science,it is a subject at which few excel?

• A)Most people who study economics are not very bright.
• B)Good economists must possess a rare combination of gifts.
• C)Economics is quite boring;hence,people tend to lose interest in it before mastering it.
• D)Good thinkers become frustrated with economics because it does not make use of the scientific method.

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Definitions:

Risk-free Rate

The theoretical return on investment of an absolutely risk-free asset, often represented by the yield on government securities.

Pure Discount Debt

A type of debt instrument that is issued at a discount to its face value, pays no interest, and is redeemed at its full face value at maturity.

Risk-free Rate

The theoretical rate of return of an investment with zero risk, typically associated with government bonds.

Call Provision

Agreement giving the corporation the option to repurchase the bond at a specified price before maturity.