Which of the Following Will Allow Monetary Policy to Be

question 74

Multiple Choice

Which of the following will allow monetary policy to be most effective in changing aggregate demand?  

• A) Interest rates need to be responsive to changes in the money supply, and investment needs to be sensitive to changes in interest rates. 
• B) Interest rates need to be responsive to changes in the money supply, but investment does NOT need to be sensitive to changes in interest rates. 
• C) Interest rates do NOT need to be responsive to changes in the money supply, but investment does need to be sensitive to changes in interest rates. 
• D) Interest rates do NOT need to be responsive to changes in the money supply, and investment does NOT need to be sensitive to changes in interest rates.

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Definitions:

External Attributions

The process of assigning the cause of an individual's behavior to factors outside the person, such as the social situation or environmental factors.

Poor Performance

The occurrence of failing to meet minimum accepted standards or objectives within professional or personal tasks.

Attribution Biases

Refers to the systematic errors made when people evaluate or try to find reasons for their own and others' behaviors.

Criticizing Performance

involves providing feedback on an individual's work or actions with a focus on areas of improvement, aiming to foster development and enhance performance.