According to the "animal spirits" described by Keynes, when optimism reigns, households and firms
A)increase spending which results in inflationary pressures.
B)decrease spending which results in deflationary pressures.
C)increase spending which results in deflationary pressures.
D)decrease spending which results in inflationary pressures.

Question

According to the "animal spirits" described by Keynes, when optimism reigns, ​households and firms
A)​increase spending which results in inflationary pressures.
B)​decrease spending which results in deflationary pressures.
C)​increase spending which results in deflationary pressures.
D)​decrease spending which results in inflationary pressures.

Quizplus · Accepted Answer

Keynes' "animal spirits" refers to the confidence and optimism that drive households and firms to increase spending, which can lead to inflationary pressures as demand rises.

According to the "Animal Spirits" Described by Keynes, When Optimism