In explaining why the level of investment spending fell to such a low level during the Great Depression, Keynes argued that
A. consumers were not saving enough of their income, so there was little credit available to businesses.
B. the interest rate was too high.
C. the interest rate was too low.
D. businesses held bleak expectations concerning future business activity and were unwilling to borrow even at low interest rates.
D. businesses held bleak expectations concerning future business activity and were unwilling to borrow even at low interest rates.
You might also like to view...
Which of the following statements is correct?
A) Dynamic open market operations are carried out to offset fluctuations in the monetary base. B) Defensive open market operations are carried out to change monetary policy. C) The volume of defensive open market operations is much greater than the volume of dynamic open market operations. D) Defensive open market operations are usually carried out through outright purchases or sales.
Refer to the above figure. Between points f and g, the opportunity cost of producing 75 more bushels of wheat is
A) 1 bushel of beans. B) 4 bushels of beans. C) 25 bushels of beans. D) 100 bushels of beans.
Which of the following is true about vertical mergers?
a. It improves coordination among the individual firms in an industry. b. It is an agreement among firms to follow a common pricing policy. c. It increases the competitiveness of the merged firms. d. It increases the market power of the merged firms.
Suppose the annual rate of inflation has been 3 percent and the annual growth rate of the money supply has been 5 percent during the last few years. In the last twelve months, however, the monetary authorities have increased the money supply at a 12 percent annual rate. The expected inflation rate for the next period will be:
a. lower than 3 percent under both the adaptive and rational expectations hypotheses. b. 3 percent under the adaptive expectations hypothesis. c. 3 percent under the rational expectations hypothesis. d. higher than 3 percent under both the adaptive and rational expectations hypotheses.