The View of Keynes That Investment Drives an Economy and Makes

question 35

Multiple Choice

The view of Keynes that investment drives an economy and makes it vulnerable to the capricious effects of speculative expectations

• A) accurately describes recent experience in the United States.
• B) is a bit overstated in the light of investment's general correlation with real GDP and the forward-looking construction of business and consumption expectations.
• C) might be correct, unless consumption expectations are out of sync with business expectations.
• D) is not at all correct, given the relative stability of the investment component of aggregate demand.
• E) is entirely false when one corrects for the effect of changes in the rental price of capital.

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Definitions:

Basal Ganglia

A group of structures located deep within the cerebral hemispheres of the brain involved in controlling movement, emotional responses, and decision making.

Cognitive Distortion

Faulty or biased ways of thinking that are believed to contribute to emotional distress and mental health disorders.

Verbal Abuses

The use of words to cause harm to the person being spoken to; it involves harmful, derogatory, or demeaning language.

Poor Childrearing

Inadequate or harmful parenting practices that negatively affect a child's development and well-being.