In the Keynesian Framework, the Way to Fight a Recession

question 196

Multiple Choice

In the Keynesian framework, the way to fight a recession is to

• A) cut taxes and/or increase government spending.
• B) reduce interest rates.
• C) increase the population with more immigration.
• D) do nothing and wait for the economy to return to full employment on its own.

---

Definitions:

Warrants

Financial derivatives that give the holder the right, but not the obligation, to buy or sell a stock at a specified price before a certain date.

Conversion Price

The price per share at which a convertible security, such as convertible bonds or preferred shares, can be converted into common stock.

Semi-Annually

A term indicating something that happens twice a year or every six months.

Straight Bond Value

The value of a bond that does not have any embedded options, calculated by considering its coupons and principal repayment, discounting back at an appropriate yield rate.