John Maynard Keynes Believed That

question 41

Multiple Choice

John Maynard Keynes believed that:

• A) consumers would save more if the interest rate was high.
• B) consumers would consume more if the interest rate was high.
• C) if consumers consume less, the interest rate will be high.
• D) the interest rate is relatively unimportant to the consumption decision.

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Definitions:

Internal Rate of Return

A metric used in financial analysis to estimate the profitability of potential investments, calculating the interest rate at which the net present value of all cash flows is zero.

Compound Interest

Accumulated interest calculation that includes both the principal amount and the interest that has been gained on it from previous periods for loans or deposits.

Cash Inflow

Represents money or cash equivalents being transferred into a company, coming from various sources like sales, investments, or financing activities.

Present Value

A calculation that determines the current worth of a future sum of money or stream of cash flows given a specified rate of return.