Based on What You've Read in the Textbook, Why Would

question 50

Multiple Choice

Based on what you've read in the textbook, why would you say that most countries largely abandoned Keynesian policies in the 1970s and 1980s?

• A) In the face of economic globalization, governments lost the ability to control economic life as they once had.
• B) The publication of Adam Smith's The Wealth of Nations pushed governments toward more liberal economic policies.
• C) High rates of unemployment forced governments to admit that Keynesian policies had failed and to look for alternatives.
• D) The fall of the Berlin Wall demonstrated the failure of communist economic policies in general and Keynesian economics specifically.

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Definitions:

Bond Issue

The process by which a government or corporation raises funds by selling bonds to investors, which are to be repaid with interest at a future date.

Amortizing

The process of spreading out a loan into a series of fixed payments over time.

Bond Discount

The difference when a bond is sold for less than its face value or par value.

Interest Expense

The cost incurred by an entity for borrowed funds, including the expense on bonds, loans, convertible debt, and lines of credit.