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:

Average Tax Rate

The ratio of the total amount of taxes paid to the taxpayer's total income, expressed as a percentage.

Dollar Tax Liability

The amount of tax payable to the government, measured in dollars, by an individual or corporation.

General Sales Tax

A broad-based tax imposed on sales of goods and services, typically at the point of sale.

Laffer Curve

A theoretical representation showing the relationship between tax rates and the amount of tax revenue collected by governments.