According to the Keynesian Transmission Mechanism (And Assuming There Is

question 3

Multiple Choice

According to the Keynesian transmission mechanism (and assuming there is no liquidity trap and investment is not interest insensitive) ,if the money supply increases,the interest rate __________,investment spending __________ and the AD curve shifts to the __________.

• A) falls; falls; left
• B) rises; rises; right
• C) falls; rises; left
• D) falls; rises; right
• E) rises; falls; right

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Definitions:

Anxiety Problems

Mental health conditions characterized by excessive and persistent worry, fear, or nervousness.

Cognitive Restructuring

A psychotherapeutic process of learning to identify and dispute irrational or maladaptive thoughts, often used in cognitive-behavioral therapy.

Counterconditioning

A behavioral therapy technique involving the pairing of an unwanted behavior or response with a new, desired stimulus to condition a more favorable response.

Catharsis

The process of releasing, and thereby providing relief from, strong or repressed emotions through articulation or activity.