The Theory That Government Borrowing May Function Like an Increase

question 246

Multiple Choice

The theory that government borrowing may function like an increase in taxes, that is, reducing current consumption and business expenditures, was formulated by

• A)John Maynard Keynes
• B)Jean Baptiste Say.
• C)David Ricardo.
• D)Adam Smith.

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Definitions:

President's Veto

The power of the President to refuse approval of a bill or joint resolution and thus prevent its enactment into law.

Coupon Rate

The yearly percentage rate of interest that is paid on a bond, relative to its nominal value.

Yield To Maturity

The total return anticipated on a bond if the bond is held until it matures, accounting for its current market price, face value, interest rate, and time to maturity.

Face Value

The original cost of a security or bond, as printed on the certificate, which does not change over time.