Monetary Policy Will Never Be Effective If Interest Rates

question 12

Multiple Choice

Monetary policy will never 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 a change in the money supply,and investment spending does not respond to changes in the interest rate.

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Definitions:

Obedience

A form of social influence where an individual follows the directions of an authority figure or a set of rules, often disregarding their own preferences or moral standings.

Compliance

The act of conforming to a request, rule, or standard.

Group Polarization Effect

The tendency for a group's prevailing opinions to become more extreme following group discussion.

Risky Shift

The phenomenon where groups collectively decide on riskier actions or decisions than individuals would make on their own.