John Maynard Keynes Influenced the Use of Fiscal Policy in the U.S.by

question 44

Multiple Choice

John Maynard Keynes influenced the use of fiscal policy in the U.S.by arguing effectively that

• A)balancing the national budget at all times was sound economic policy
• B)natural economic forces were not necessarily adequate to move the economy toward its potential output level
• C)the government did not need to stimulate output in order for the economy to achieve its potential output level
• D)increases in taxes and increases in government purchases are equally effective in closing an expansionary gap
• E)increases in taxes and increases in government purchases are equally effective in closing a contractionary gap

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Definitions:

Par Preferred Stock

A type of preferred stock with a nominal face value, which determines dividend payments and is prioritized over common stock in the event of liquidation.

Common Stock

A type of security that represents ownership in a corporation, giving holders voting rights and a share in the company’s profits through dividends.

Stockholders' Equity

The residual interest in the assets of a corporation that remains after deducting liabilities, representing ownership interest.

Par Value Common Stock

The nominal or face value assigned to shares of common stock in the corporate charter, which has little relation to the market value of the shares.