The linkages of the interest-rate-based transmission mechanism of monetary policy are summarized as follows:
A) change in the money supply ? change in speculative balances ? change in transactions balances ? change in planned investment ? change in aggregate demand.
B) change in the money supply ? change in planned investment ? change in government spending ? change in aggregate demand.
C) change in the money supply ? change in interest rates ? change in planned investment ? change in aggregate demand.
D) change in the money supply ? change in interest rates ? change in transactions balances ? change in government spending ? change in aggregate demand.
C
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A firm should use marginal analysis when making a price-output decision.
Answer the following statement true (T) or false (F)
Unemployment
a. usually decreases whenever nominal GDP decreases. b. usually increases whenever real GDP decreases. c. usually decreases whenever nominal GDP increases. d. usually increases whenever the price level increases.
Usually an abundance of natural resources ________ average labor productivity.
A. doubles B. increases C. has no effect on D. decreases
Use the aggregate expenditures model and the following values to answer the next question. AMPCIGT$7500.5$1,000$1,000$500Determine equilibrium real GDP for this economy.
A. $5,000 B. $5,500 C. $4,000 D. $4,500