The Monetary Policy Multiplier Is Large If

question 1

Multiple Choice

The monetary policy multiplier is large if

• A)the LM-curve is steep and the IS-curve is flat
• B)the LM-curve is flat and the IS-curve is steep
• C)money demand is very interest sensitive
• D)investment is very interest insensitive
• E)both money supply and money demand are very interest sensitive

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