The AS/AD Model Implies That Monetary Policy Should Be Used

question 61

Multiple Choice

The AS/AD model implies that monetary policy should be used to:

• A)make adjustments so that savings equal investment.
• B)keep the money supply growing at a constant rate.
• C)keep the interest rate constant.
• D)keep the price level constant.

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Definitions:

Transferring

The process of moving items, such as data, assets, or inventory, from one location or account to another.

Ledger Accounts

Individual records within the general ledger that show the transactions and balances for each accounting period, relating to specific assets, liabilities, equity, revenues, and expenses.

Recording

The process of documenting financial transactions in the accounting records of a business.

Journal

A detailed record where all financial transactions of a business are initially recorded before summarizing them into ledgers.