In Keynes's view, an excess quantity of money supplied causes people to:
A. sell bonds and the interest rate rises.
B. buy bonds and the interest rate falls.
C. buy bonds and the interest rate rises.
D. increase speculative balances.
Answer: B
You might also like to view...
In a single payer model of healthcare, the government pays for all healthcare. Because patients access healthcare at a zero or low cost, the quantity of healthcare services demanded exceeds the quantity provided
A) Both sentences are false. B) The first sentence is false; the second sentence is correct. C) The first sentence is correct; the second sentence is false. D) Both sentences are correct.
People hold money even during inflationary episodes when other assets prove to be better stores of value. This can be explained by the fact that money is
A) extremely liquid. B) a unique good for which there are no substitutes. C) the only thing accepted in economic exchange. D) backed by gold.