According to Keynesians,for Monetary Policy to Have a Stimulative Effect

question 67

Multiple Choice

According to Keynesians,for monetary policy to have a stimulative effect on GDP,a/an:

• A)increase in the money supply is needed which lowers the interest rate in order to stimulate higher levels of investment.
• B)increase in the money supply is needed which lowers the interest rate in order to lower levels of investment.
• C)decrease in the money supply is needed which lowers the interest rate in order to stimulate higher levels of investment
• D)decrease in the money supply is needed which causes the interest rate to rise in order to stimulate higher levels of investment.
• E)increase in the money supply is needed which causes the interest rate to rise in order to stimulate higher levels of investment.

---

Definitions:

Risk

The possibility of loss or another adverse outcome resulting from a particular action or event.

Negatively Skewed Distribution

A probability distribution that is skewed to the left, indicating that the tail on the left side of the probability density function is longer or fatter than the right side.

Negative Correlation Coefficient

A statistical measure indicating that as one variable increases, the other variable tends to decrease.

Linear Relationship

A type of connection between two variables where the change in one is directly proportional to the change in the other.