The Monetary Transmission Mechanism Can Be Set in Motion When

question 65

Multiple Choice

The monetary transmission mechanism can be set in motion when a rise in the price level causes

• A)an increased demand for money balances,leading people to sell bonds,which in turn raises the interest rate.
• B)an increased demand for money balances,leading people to sell bonds,which in turn decreases the interest rate.
• C)an increased demand for money balances,leading people to buy bonds,which in turn decreases the interest rate.
• D)a decreased demand for money balances,leading people to buy bonds,which in turn decreases the interest rate.
• E)a decreased demand for money balances,leading people to sell bonds,which in turn raises the interest rate.

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