The Interest-Rate-Based Transmission Mechanism for Monetary Policy in the Keynesian

question 257

Multiple Choice

The interest-rate-based transmission mechanism for monetary policy in the Keynesian system indicates that

• A) increases in the money supply lead to decreases in the interest rate, which decreases investment, which decreases the level of real GDP.
• B) decreases in the money supply lead to increases in the interest rate, which increases investment, which increases the level of real GDP.
• C) increases in the money supply cause people to spend more, leading to increases in real GDP.
• D) increases in the money supply lead to decreases in the interest rate, which increases investment, which increases the level of real GDP.

---

Definitions:

Decertification Election

A vote by employees to determine whether they wish to remove their current union as their representative in collective bargaining.

Employees

Individuals who are hired to perform specific duties and tasks in exchange for compensation from an employer.

Bargaining Units

Workers grouped together by similar interests, who have a single labor union represent them in collective negotiation talks.

NLRB

The National Labor Relations Board, a federal agency in the United States that enforces labor laws related to collective bargaining and unfair labor practices.