What Did Keynes Use the Term "Animal Spirits" to Refer

question 120

Multiple Choice

What did Keynes use the term "animal spirits" to refer to?

• A)debates by politicians concerning fiscal policy
• B)arbitrary changes in attitudes of households and firms
• C)mean-spirited economists who believed in the classical dichotomy
• D)firms' relentless efforts to maximize profits

---

Definitions:

Moral Hazard

A situation in which one party engages in risky behavior knowing that it is protected against the risk by another party.

Asymmetric Information

A situation where one party in a transaction has more or superior information compared to another, often leading to an imbalance in the transaction.

Small Firms

Businesses often characterized by a small number of employees, limited market share, and possibly locally oriented markets.

Principal-Agent Problem

A situation in economics where there is a conflict of interest between a principal (such as a shareholder) and an agent of the principal (such as a manager), due to the agent having more information.