In the AS/AD model, an increase in the money supply causes an increase in the interest rate and an increase in investment spending.
Answer the following statement true (T) or false (F)
False
An increase in the money supply increases the credit available to banks, which depresses interest rates and increases business investment.
You might also like to view...
Why is it difficult to make accurate and valid comparisons of real GDP or GNP for different countries, and how do the World Bank and the IMF deal with these difficulties?
What will be an ideal response?
To calculate the slope of a curved line, you can calculate the slope at a point on the curve or across an arc of the curve
Indicate whether the statement is true or false
The explanation for the law of demand involves:
A. consumers' ability to substitute different goods. B. the government's ability to set prices. C. suppliers' ability to substitute inputs. D. the market's ability to equate supply and demand.
The unionization rate of public sector workers is about:
A. 10.3%. B. 17.1%. C. 24.4%. D. 34.4%.