Keynes Believed That the Way to Prevent Recessions and Depressions

question 168

Multiple Choice

Keynes believed that the way to prevent recessions and depressions was to

• A) reduce spending when there is a recessionary gap.
• B) only change tax rates as a means of regulating the economy.
• C) maximize the crowding out effect.
• D) increase aggregate demand through expansionary fiscal policy.

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Definitions:

FOB Shipping Point

A shipping term indicating that the buyer takes responsibility for loss or damage once the goods are shipped, and pays the shipping cost.

Terms

Conditions that are agreed upon in a financial or business arrangement.

Merchandise Inventory

The total value of a company's goods that are available for sale at the end of an accounting period.

Cash

Money in the form of coins or banknotes, especially that owned by a person or organization.