According to Keynes, a Pessimistic Outlook Causes Consumers and Businesspersons

question 171

Multiple Choice

According to Keynes, a pessimistic outlook causes consumers and businesspersons to ____, and a recession could occur.

• A)increase planned investment
• B)decrease planned spending
• C)increase exports
• D)decrease imports
• E)decrease saving

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Definitions:

Risk-free Asset

An investment with a guaranteed return and no risk of financial loss, often exemplified by government bonds.

Adequately Diversified

A portfolio strategy minimizing risk by investing in a wide variety of assets, ensuring that the performance of one investment does not dramatically impact overall portfolio performance.

Portfolio's Beta

A measure of the volatility, or systemic risk, of a portfolio in comparison to the market as a whole.

Standard Deviation

A measure of the dispersion or variation in a distribution or set of data, widely used in statistics to gauge the volatility of financial returns.