According to the Austrian View of the Business Cycle, If

question 41

Multiple Choice

According to the Austrian view of the business cycle, if expansionary monetary policy pushes the interest rate to an artificially low level, the result will be

• A)a long-term increase in output and employment.
• B)malinvestment and an unsustainable economic boom, followed by a recession.
• C)an increase in demand stimulus, that will expand employment and lead to a rapid increase in long-term economic growth.
• D)a temporary increase in the inflation rate, followed by a sustainable expansion in output and employment.

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Definitions:

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