According to Monetarists, an Expansionary fiScal Policy

question 164

Multiple Choice

According to monetarists, an expansionary fiscal policy

• A) will be ineffective because the interest rate will rise and crowd out private investment spending.
• B) should not be permitted so long as a public debt exists.
• C) should be used only when unemployment exceeds 6 percent of the labor force.
• D) will be effective, provided the money supply is held constant.

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