The interest-rate-based monetary policy transmission mechanism argues that an increase in the money supply
A) has no effect on aggregate demand but reduces long-run aggregate supply.
B) has no effect on aggregate demand but increases short-run aggregate supply.
C) causes interest rates to fall, which causes an increase in planned investment, and an increase in aggregate demand.
D) causes the inflation rate to decline, which causes an increase in household consumption spending and an increase in aggregate demand.
C
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Dunston Military Academy has an annual deficit of $250,000. Its 1,000 students pay tuition of $10,000 each per year. The economics faculty has recommended solving the problem by recruiting additional athletes with $5,000 scholarships. Each additional athlete will cost the school $2,500 (equipment, etc.). Assuming the academy agrees, how many athletes are needed to eliminate the deficit?
A. Zero, the deficit cannot be eliminated by giving more scholarships. B. 25 C. 50 D. 100
Which of the following is true of investment spending in the U.S. economy?
a. Investment spending in 2009 was higher than in 2006. b. Investment spending was almost double of household spending. c. Businesses had reduced expenditures on capital goods in 2008 and 2009. d. Investment spending exhibited a more or less steady increase between 1959 and 2009. e. Investment spending fluctuated relatively less than consumption.
The supply function
A. does not include technology. B. shows the relationship between the quantity supplied of X and variables other than its price. C. recognizes that the quantity of a good produced depends on its price and supply shifters. D. describes how much of good X will be produced at an alternative price of good X, given all the other variables being constant.
To derive the labor market demand curve, the labor demand curves for each firm in the output market of interest are summed
Indicate whether the statement is true or false