Keynesian Economists Argue That Monetary Policy Works Through Its Effects

question 195

Multiple Choice

Keynesian economists argue that monetary policy works through its effects on:

• A) interest rates and investment.
• B) price- and wage-flexibility.
• C) budget deficits and trade deficits.
• D) the spending and money multipliers.

---

Definitions:

Real Exchange Rate

The rate at which one country's currency can be traded for another country's currency, adjusted for inflation.

Malaysian Ringgits

The currency of Malaysia, symbolized as MYR.

Nominal Exchange Rate

The nominal exchange rate is the rate at which one country's currency can be traded for another's, not adjusted for inflation.

Nominal Exchange Rate

The rate at which one currency can be exchanged for another without adjusting for inflation, representing the current market price.