Question

Keynes suggested that you could improve your estimates of the 10 year yield on a business investments​ by:

A.computing the variance and standard deviation of the investments at least quarterly.

B.analyzing when the​ 'animal spirits' had peaked.

C.plotting the forecast in a normal distribution.

D.none of the above.

Answer 1

Que. Keynes suggested that you could improve your estimates of the 10 year yield on a business investments by:

Ans. B. Analysing when the animal spirits had peaked

Keynes proposed that the “only way individual can make decision in an uncertain environment if animal spirits guide them. He explained the role of emotion in business decision. He believed that in economic disturbance irrational thoughts might influence people as they follow their financial self- interest. He tried to estimate future yield of business through General theory and explained that future yield of business could be estimated using available insight. He proposed that animal spirit is the way on basis of which people can make decisions in an undetermined environment as animal spirit guide them.