If a Keynesian Economist Were Asked to Make a Statement

question 37

Multiple Choice

If a Keynesian economist were asked to make a statement about the relationship between the government and the economy,what might he or she say?

• A) "Government intervention is the only solution for economic problems."
• B) "It is never a good idea for the government to intervene in the economy."
• C) "The government's only role is to provide defense and protect property rights."
• D) "The government should be primarily concerned with public safety and health."
• E) "Government intervention in the economy is sometimes necessary."

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Definitions:

Interest Rates

The cost of borrowing money or the return on invested funds, typically expressed as a percentage.

After-Tax Profit

The amount of income left after all taxes have been deducted from the gross income.

Economy

An area of the production, distribution, or trade, and consumption of goods and services by different agents in a given geographical location.

Corporate Tax Rate

The rate at which businesses are taxed on their profits by the government.