Keynes Believed That an Increase in Savings Would

question 173

Multiple Choice

Keynes believed that an increase in savings would:

• A)raise aggregate demand by reducing investment.
• B)raise aggregate demand by increasing consumption.
• C)reduce aggregate demand by reducing investment.
• D)reduce aggregate demand by reducing consumption.

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Definitions:

Internal Rate of Return

A metric used in capital budgeting to estimate the profitability of potential investments.

Economic Return

The profit or loss generated on an investment over a specific period, considering both cash flow and changes in market value.

Time Value of Money

A financial principle that money available today is worth more than the same amount in the future due to its potential earning capacity.

Operating Costs

Expenses associated with the operation and maintenance of a business or asset, excluding taxes and interest costs.