The Keynesian mechanism through which monetary policy affects the price level, real GDP, and employment depends on the impact of the:

a. interest rate on savings.
b. inflation on investment.
c. interest rate on investment.
d. interest rate on bond prices.


c

Economics

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If the reserve requirement is 20% and commercial bankers decide to hold additional excess reserves equal to 5% of any newly acquired checkable deposits, then the effective monetary multiplier for the banking system will be

A. 3. B. 4. C. 5. D. 6.

Economics

________ unemployment is short term, but ________ unemployment can last for longer periods because workers need time to acquire new skills

A) Cyclical; frictional B) Structural; seasonal C) Seasonal; frictional D) Frictional; structural

Economics

The total cost (TC) of producing computer software diskettes (Q) is given as: TC = 200 + 5Q. What is the variable cost?

A) 200 B) 5Q C) 5 D) 5 + (200/Q) E) none of the above

Economics

Answer the following questions true (T) or false (F)

1. The Fed can simultaneously reduce the inflation rate and stimulate growth through lowering interest rates. 2. A monetary policy target is a variable that the Fed can affect directly, which then affects one or more of the Fed's policy goals. 3. Ceteris paribus, an increase in the money supply will lower short-term interest rates.

Economics