The interest-rate-based transmission mechanism for monetary policy in the Keynesian system indicates that
A) decreases in the money supply lead to increases in the interest rate, which increases investment, which increases the level of real GDP.
B) increases in the money supply cause people to spend more, leading to increases in real GDP.
C) increases in the money supply lead to decreases in the interest rate, which decreases investment, which decreases the level of real GDP.
D) increases in the money supply lead to decreases in the interest rate, which increases investment, which increases the level of real GDP.
D
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The actual value of the price elasticity of demand is always
A) positive because of the law of demand. B) negative because of the law of demand. C) positive because of diminishing marginal utility. D) negative because percentages can only be negative.
If a movie theater is going to gain by charging students a dollar less than other customers,
a. the demand of students must be more elastic than that of other customers. b. the demand of students must be less elastic than that of other customers. c. students must have higher incomes than other customers. d. other customers must enjoy movies more than students.
George likes skiing and needs one pair of bindings for each pair of skis he owns. George's indifference curves for skies and bindings
A. are straight lines. B. are approximately L-shaped. C. slope downward. D. slope upward.
In theory, if a profit-maximizing firm in a perfectly competitive labor market found it advantageous to hire one less worker, the firm should pay a
A. higher wage rate to all previous workers hired. B. lower wage rate but only to the most recently hired workers. C. lower wage rate to all previous workers hired. D. higher wage rate but only to the most recently hired workers.