According to Keynes

question 72

Multiple Choice

According to Keynes:

• A) Small disturbances in prices and output are always short term.
• B) The economy is inherently stable.
• C) Government intervention in the economy is necessary at times.
• D) High unemployment is always a temporary situation.

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Definitions:

Leverage Ratio

The ratio of assets to bank capital.

Reserves

Assets held by a bank or financial institution, often to meet regulatory requirements or as a safeguard against potential crises.

Discount Rate

The interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility.

Money Supply

The overall pool of financial assets in an economy at a given stage.