Monetary Policy Will Not Be Effective If Interest Rates

question 38

Multiple Choice

Monetary policy will not be effective if interest rates

• A)Change quickly.
• B)Respond to a change in the money supply,and investment spending responds to a change in the interest rate.
• C)Do not respond to changes in the money supply,and investment spending does not respond to changes in the interest rate.
• D)Change slowly.

---

Definitions:

Straight-Line Method

An accounting method of depreciation where an asset's cost is evenly spread over its useful life.

Intra-Entity

Referring to transactions or activities that occur within the same legal entity or among different units of the same corporation.

Ten-Year Bonds

Long-term debt securities issued by entities, maturing in ten years, and often used to raise capital.

Amortization

The process of gradually writing off the initial cost of an intangible asset over its useful life.