Which of the Following Is a Reason Why Monetary Policy

question 67

Multiple Choice

Which of the following is a reason why monetary policy can be effectively used to stimulate aggregate demand in the short run?

• A) Monetary policy stimulates aggregate demand by working through the positive relationship between the price level and the quantity of investment demanded.
• B) Monetary policy stimulates aggregate demand by working through the negative relationship between the interest rates and the quantity of investment demanded.
• C) Monetary policy stimulates aggregate demand by working through the positive relationship between the interest rates and the general price level.
• D) Monetary policy stimulates aggregate demand by working through the positive relationship between the interest rates and the quantity of investment demanded.

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