If Investment Is Not Very Sensitive to Interest Rate Changes

question 37

Multiple Choice

If investment is not very sensitive to interest rate changes,

• A)fiscal policy will be largely ineffective in changing output
• B)monetary policy will be very effective in changing output
• C)the economy is in the classical case
• D)monetary policy cannot be used to lower interest rates
• E)the size of the crowding out effect following expansionary fiscal policy will be small

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Definitions:

Low Return Rate

Refers to the proportion of goods returned to the seller being relatively small compared to the quantity sold, often seen in retail and e-commerce sectors.

Generalizable

The extent to which findings from a study can be applied or extended to broader populations or settings beyond the original research context.

Prevent Bias

Strategies or practices aimed at identifying and eliminating personal, cultural, and structural prejudices that can affect decision-making and outcomes.

Larger Sample

Refers to a more substantial portion or quantity of items or individuals selected from a population, used in research to increase the representativeness and accuracy of results.