In the bank lending channel, an important reason for output increases in the short run after an expansionary monetary policy is that
A) the funds directly available for households and firms to spend will increase.
B) prices will increase, making increased production more profitable for firms.
C) the increase in government spending from an expansionary monetary policy increases output through the multiplier effect.
D) the ability of banks to make loans will increase.
D
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What will be an ideal response?
In the above figure, when the price of Good B increases, the result can be shown by
A. the movement from D1 to D2 in Graph A. B. the movement along D0 from P2 to P1. C. the movement along D0 from P1 to P2. D. the movement from D2 to D1 in Graph A.
The large increases in the deficit during the 1980s in the United States were associated with
A) large increases in public saving. B) no change in public saving. C) large increases in private saving. D) all of the above E) none of the above
All of the following result from price floors in agriculture EXCEPT
A) surpluses of agricultural products that have price floors. B) higher prices to consumers for agricultural products that have price floors. C) lower prices to consumers for agricultural products that have price floors. D) governmental bureaucracy.