In the Balance Sheet Channel, an Expansionary Monetary Policy

question 66

Multiple Choice

In the balance sheet channel, an expansionary monetary policy

• A)will lead to a greater increase in output than in the money channel.
• B)will not affect the real interest rate.
• C)will result in increased spending only for firms and households dependent for credit on bank loans.
• D)will lead to a larger budget deficit than in the money channel.