John Maynard Keynes Argued That If Many Households Decide at the Same

question 123

Multiple Choice

John Maynard Keynes argued that if many households decide at the same time to increase saving and reduce spending,

• A)this will increase investment spending in the short run and expand the economy in the long run.
• B)the economy will benefit in the short run but the effect will not last into the long run.
• C)this will have a major negative impact on the economy in both the short run and in the long run.
• D)they may make themselves worse off by causing aggregate expenditure to fall, thereby pushing the economy into a recession.
• E)they will improve the economy in both the short and long run.

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Definitions:

Oral Auction

An event where items or services are sold to individuals who make the highest spoken offer.

True Values

Refers to the actual, inherent value or worth of an item, property, or financial instrument, as opposed to its market price or cost.

Just over

Slightly more than a specified amount, number, or degree.

Consumer Surplus

The discrepancy between what consumers are ready and able to spend on a good or service and the amount they end up paying.