Keynes's Theory Did Not Endorse the Use of Monetary Policy

question 106

Multiple Choice

Keynes's theory did not endorse the use of monetary policy during the Great Depression because:

• A) at the time,the nominal interest rate was very close to zero.
• B) during the Second World War,the convertibility of the pound sterling into gold was suspended.
• C) under the gold standard,the zero bound on nominal interest rates did not exist.
• D) monetary expansions were impossible under a gold standard.

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Definitions:

Labor-Management

The interaction, negotiation, and relationship between the workforce (labor) and the management team of an organization, often focusing on collective bargaining, workplace conditions, and labor rights.

Labor Agreement

A contractual agreement between an employer and a group of employees (often represented by a union) regarding terms of employment.

Break-Even Analysis

An evaluation to determine the point at which revenues and expenses are equal, and no net loss or gain is achieved.

Variable Costs

Costs that change in proportion to the level of activity or volume of output in a business, such as materials and labor costs.