According to Keynes, why might money deposited in banks not find its way to new productive investments?
A) Banks might not be confident that the would-be investors will be able to repay the loan with interest.
B) Businesses might not be confident that the investments they are contemplating will be profitable.
C) Business conditions in general are unattractive for new investments.
D) All of the above.

Question

Quizplus · Accepted Answer

Keynes argued that even if people saved money and deposited it in banks, these funds would not necessarily be channeled into new productive investments. This is because banks may not be confident that the would-be borrowers will be able to repay their loans with interest, businesses may not be confident that their investments will be profitable, or business conditions in general may be unattractive for new investments. Therefore, all of the above choices are correct.

According to Keynes, Why Might Money Deposited in Banks Not