Question

It says I got these wrong... Indicate whether each view follows the traditional (neoclassical) view of...

It says I got these wrong...

Indicate whether each view follows the traditional (neoclassical) view of money, banking, and capitalist economies, or the (post)Keynesian view.

__2__

Money precedes production

__2__

Money developed through rational, private actors in an attempt to economize on transaction costs

__2__

The level of investment depends most significantly on expectations ('animal spirits')

__1__

Loans create the money necessary to invest, and therefore to produce and generate an income to deposit into banks. (loans create deposits)

__1__

The level of investment depends most significantly on the interest rate

__1__

Production precedes money

__1__

Deposits into banks create the funds that get loaned out. (deposits create loans)

Suppose a bank makes a loan to a small business so that business can purchase a new machine press. Which of the following are true of that event--that is, of the bank lending to the business?

Question options:

The business becomes more liquid

The bank holds an asset in the form of the loan agreement (the business' promise to repay the loan)

The bank holds an asset in the form of the checking account opened up for the business.

The bank becomes more liquid

The business takes on a liability in the form of the loan agreement (the business' promise to repay the loan)

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