As Consumption Becomes More Sensitive to the Real Rate of Interest

question 56

Multiple Choice

As consumption becomes more sensitive to the real rate of interest,

• A) the IS curve gets steeper and monetary policy grows more effective in manipulating GDP in the short run.
• B) the IS curve gets flatter and monetary policy grows more effective in manipulating GDP in the long run.
• C) the IS curve gets flatter and monetary policy grows more effective in manipulating GDP in the short run.
• D) the IS curve is unaffe c t e d, but monetary policy grows we a ker nonetheless.
• E) the IS curve gets steeper and monetary policy grows less effective in manipulating GDP in the long run.

---

Definitions:

Secreted

Refers to the process by which substances are produced and discharged from a cell, gland, or organ for a particular function in the organism or for excretion.

Glucose

A simple sugar and important energy source in living organisms, serving as a primary cellular fuel.

Active Transport Proteins

Proteins that use energy to move substances across a cell membrane against a concentration gradient, from lower to higher concentration.

Small Intestine

A part of the gastrointestinal tract between the stomach and the large intestine where most of the digestion and absorption of nutrients occurs.