Monetary Policy Will Be Ineffective If

question 135

Multiple Choice

Monetary policy will be ineffective if

• A)The demand for money is very sensitive to changes in the interest rate,but the investment demand is not.
• B)The demand for money and investment demand are both very sensitive to changes in the interest rate.
• C)Interest rates are sensitive to the quantity of money supplied,and investment spending is sensitive to changes in the interest rate.
• D)Investors have favorable expectations for future sales.

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