Statement I: Fiscal Policy Was Invented by John Maynard Keynes

question 34

Multiple Choice

Statement I: Fiscal policy was invented by John Maynard Keynes in the 1930s.
Statement II: Until the 1980s,virtually all economists thought that the federal government should balance its budget every year.

• A)Statement I is true and statement II is false.
• B)Statement II is true and statement I is false.
• C)Both statements are true.
• D)Both statements are false.

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Definitions:

Required Returns

The minimum expected return on an investment, determined by the investor's risk tolerance and the investment's risk level.

Diversifiable Risks

Risks that can be reduced or eliminated through diversification in an investment portfolio.

Beta

A measure of a security's volatility in relation to the overall market; used in the capital asset pricing model to determine the expected return of an asset.

Risk-Free Rate

The rate of return of an investment with no risk of financial loss, typically represented by government bonds.