If Desired Investment Spending Is Relatively Sensitive to Changes in Interest

question 31

Multiple Choice

If desired investment spending is relatively sensitive to changes in interest rates,then monetary policy could be very useful because it would

• A)be very effective in reducing expenditure during inflationary periods and very effective in expanding expenditure during recessionary periods.
• B)be very effective in reducing expenditure during inflationary periods and ineffective in expanding expenditure during recessionary periods.
• C)be very ineffective in reducing expenditure during inflationary periods and very effective in expanding expenditure during recessionary periods.
• D)be very ineffective in reducing expenditure during inflationary periods and very ineffective in expanding expenditure during recessionary periods.
• E)be somewhat effective in reducing expenditure during inflationary periods and very ineffective in expanding expenditure during recessionary periods.

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Definitions:

Blastula

An early stage of embryonic development in animals, characterized by a spherical layer of cells (the blastoderm) surrounding a fluid-filled cavity (the blastocoel).

Embryonic Development

The process by which an embryo forms and develops, involving cell division, migration, and differentiation to establish the basic plan of an organism.

Neural Crest

A population of cells in vertebrate embryos that arises from the embryonic ectoderm and migrates to form diverse cell types, including melanocytes, craniofacial cartilage, and neurons.

Organogenesis

The phase during embryonic development where organs form from the three germ layers, setting the foundation for functional body systems.