In Analyzing Recessions,Keynes' View Was That

question 3

Multiple Choice

In analyzing recessions,Keynes' view was that

• A)the economy may eventually recover by itself,but it takes too long.
• B)the government could stimulate aggregate purchases by reducing the budget deficit.
• C)the economy will never recover because wages and prices will never adjust downward.
• D)any cyclical unemployment will be short-lived,and thus there is no need for increased government spending.

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Definitions:

Affirmative Covenants

Clauses in a loan agreement that require the borrower to perform certain actions to maintain the terms of the loan.

Borrower Must

Requirements or conditions that a borrower is obliged to meet in order to qualify for a loan or maintain its good standing.

Agency Cost

Agency cost refers to the expenses incurred due to the conflict of interest between shareholders and management within a company.

Principals

Fundamental truths or propositions that serve as the foundation for a system of belief or behavior or for a chain of reasoning.