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what did Keynes think about business people? a. he thought that they were very entrepreneurial. b....

what did Keynes think about business people?

a. he thought that they were very entrepreneurial.

b. he respected their bold and decisive leadership

c. he thought that they were very sensitive to change in real interest rates

d. he thought that they were very practical

e. he thought that they were rather unimaginative followers (rather than leaders) when it came to investment decision-making

d. he thought that thy were very practical

e. he thought they were rather unaimagive follower (rather than leaders) when it came to investment decision maing

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Answer #1

C. Keynes thought that they were very sensitive to change in real interest rates.

If we derive the Keynesian model we see than the actual expenditure depends upon consumption and investment. We also know that investment is negatively related to the rate of interest. So if the rate of interest is high investment will be low and vice versa. Thus even a small change in the interest rate will affect the investment of the business people. Thus option C is the correct option.

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