Keynesian Theory Is Based on the Hypothesis That

question 288

Multiple Choice

Keynesian theory is based on the hypothesis that

• A)saving and consumption are influenced primarily by real current disposable income.
• B)saving is influenced primarily by the interest rate.
• C)planned savings equal planned investment only at full employment.
• D)full employment is automatically attained in any economy.

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Definitions:

Insuring Bank Deposits

A government or independent institution's act of providing a guarantee to bank depositors that their deposits will be protected up to a certain limit in the event of a bank failure.

Time Deposits

Time Deposits are savings accounts or certificates of deposit (CDs) that lock the depositor's funds for a certain period of time, during which early withdrawal incurs penalties.

Reserve Requirements

The portion of depositors' balances that banks must have on hand as cash, mandated by central banking authorities.

Treasury Bills

Short-term government securities issued with a promise to be paid back at a specified future date with a fixed interest rate.