Monetary Policy Will Be Least Effective in Changing Aggregate Demand

question 9

Multiple Choice

Monetary policy will be least effective in changing aggregate demand when the

• A)investment demand curve and money demand function are both relatively flat.
• B)investment demand curve and money demand function are both relatively steep.
• C)investment demand curve is relatively steep and the money demand function is relatively flat.
• D)investment demand curve is relatively flat and the money demand function is relatively steep.
• E)None of the above - monetary policy is always equally effective.

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