According to Keynesian Analysis, Why Might Lowering Interest Rates Not

Multiple Choice

According to Keynesian analysis, why might lowering interest rates not work to stimulate enough investment to absorb all of planned savings in the economy?

A) The only possible interest rate for equilibrium between savings and investment to occur would be negative.
B) Banks will not offer to pay lenders to borrow money.
C) During a recession, the outlook is for negative profits on new investment because of a lack of sufficient market demand for goods.
D) All of the above.