Because Keynes Assumed That the Expected Return on Money Was

question 16

Multiple Choice

Because Keynes assumed that the expected return on money was zero,he argued that people would

• A)never hold money.
• B)never hold money as a store of wealth.
• C)hold money as a store of wealth when the expected return on bonds was negative.
• D)hold money as a store of wealth only when forced to by government policy.

---

Definitions:

Earnings Before Interest

A company's earnings calculated before interest expenses have been deducted, often referred to as EBIT (Earnings Before Interest and Taxes).

Tax Authorities

Governmental agencies responsible for the collection of taxes, enforcement of tax laws, and the administration of tax policy.

Net Sales

Revenue from the sale of goods or services after the deduction of returns, allowances for damaged or missing goods, and discounts.

P/E Ratio

Stands for Price-to-Earnings Ratio, which measures a company's current share price relative to its per-share earnings, often used to gauge valuation.