For Monetary Policy to Be Effective in Changing Planned Investment

question 76

Multiple Choice

For monetary policy to be effective in changing planned investment spending, _____

• A) interest rates must not be responsive to changes in the money supply.
• B) interest rates must be sensitive to changes in gross domestic product.
• C) investment must be sensitive to changes in interest rates.
• D) investment must be sensitive to changes in the price level.
• E) interest rates must be sensitive to changes in the price level.

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