In the monetarist model, an autonomous increase in investment demand would have
a. only a weak effect on the level of output.
b. a strong positive effect on the level of output.
c. no effect on the interest rate.
d. stronger effects on output if financed with increases in the money supply.
e. both a and d.
E
You might also like to view...
National saving is the sum of _____ and _____. In a closed economy it is equal to _____ in equilibrium
Fill in the blank(s) with correct word
Additionally, the federal funds rate is
A. Very important for the Fed's monetary policy because individual borrowers pay this interest rate for mortgage loans B. Very important for the Fed's monetary policy because the Fed uses the federal funds rate as a monetary policy target since it can control the rate through open market operations C. Very important for the Fed's monetary policy because it is Administratively set by the Fed
In the diagram, the economy's long-run aggregate supply curve is shown by line:
A. 1.
B. 2.
C. 3.
D. 4.
Thinking of a Gap store as a production plant, explain why Gap is making a decision to reduce the size of its stores. Is Gap's decision a long-run decision or a short-run decision?
What will be an ideal response?