The Money Supply Increased and the AD Curve Did Not

question 168

Multiple Choice

The money supply increased and the AD curve did not shift to the right.This is consistent with the

• A) Keynesian transmission mechanism when there is either a liquidity trap or interest-insensitive investment.
• B) monetarist transmission mechanism when there is interest-insensitive investment.
• C) Keynesian transmission mechanism when there is a liquidity trap.
• D) monetarist transmission mechanism when there is a liquidity trap.
• E) c and d

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Definitions:

Long-Term Financial Plans

Strategies and financial goals set by a business or individual for a period extending beyond one year.

Budgets

Financial plans that outline expected revenues and expenditures for a specific period of time.

Informal Plan

An unstructured and often unofficial approach to managing or addressing tasks, projects, or problems, lacking formal documentation or procedure.

Budgeting

The process of creating a plan to spend your money, outlining projected income versus expenses for a given period.