In the Keynesian View, Equilibrium Takes Place When

question 52

Multiple Choice

In the Keynesian view, equilibrium takes place when

• A) the real and nominal interest rates are equal.
• B) the level of total spending in the economy is equal to current output.
• C) current output is equal to the economy's long-run potential.
• D) the money supply is growing at a constant rate.

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Definitions:

Enduring Popularity

a state whereby something maintains widespread approval, support, or use over a long period.

Interest Rate

The piece of a loan accruing interest charges against the borrower, usually depicted as an annual percentage of the outstanding loan quantity.

Perfect Asset Market

A theoretical financial market where securities are perfectly liquid, information is freely available to all investors, and there are no transaction costs, allowing for the efficient allocation of assets.

Annual Interest Rate

The percentage rate indicating the total amount of interest paid or earned over a one-year period.