In Keynes's View, an Excess Quantity of Money Demanded Causes

question 92

Multiple Choice

In Keynes's view, an excess quantity of money demanded causes people to:

• A) sell bonds and the interest rate rises.
• B) buy bonds and the interest rate falls.
• C) buy bonds and the interest rate rises.
• D) increase speculative balances.

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Definitions:

Journalize

The process of recording transactions in a journal or diary, which includes specifying the accounts affected and the amounts, usually as a first step in the accounting cycle.

Due Date

The specified date by which a payment must be made or a task must be completed.

Interest Due

The amount of interest that has been incurred on a loan or debt but has not yet been paid.

Maturity

The date on which a loan or bond comes due and the principal must be repaid or the date upon which an investment reaches its full value.