Which of the Following Statements Is Correct

question 52

Multiple Choice

Which of the following statements is correct?

• A) Because in practice few borrowers are bank-dependent, the bank lending channel is of little real-world importance.
• B) In the interest rate channel, an expansionary monetary policy may cause a leftward shift in the AD curve.
• C) In the bank lending channel, an expansionary monetary policy can increase output in the short run even if it does not result in a decrease in the real interest rate.
• D) In the interest rate channel, an expansionary monetary policy affects spending but not output.

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