The Prevailing Budget Philosophy Prior to Keynes Called for a Balanced

question 46

Multiple Choice

The prevailing budget philosophy prior to Keynes called for a balanced budget. Keynes argued that the government should not balance its budget but instead have budget deficits during

• A) economic booms.
• B) during periods of peace but surpluses during periods of war.
• C) periods of inflation.
• D) economic recessions.

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Definitions:

Investing

The process of distributing funds with the aim of achieving returns or financial gain.

Form

A specific type of document or report required by regulatory agencies for various financial filings and disclosures.

CAPM

The Capital Asset Pricing Model, a theory used to determine the expected return on investment by correlating the risk and the non-diversifiable risk of the market.