Monetary Policy Is Most Effective When the Money Demand Curve

question 114

Multiple Choice

Monetary policy is most effective when the money demand curve is __________ and investment demand is _____________.

• A)horizontal; elastic
• B)downward-sloping; elastic
• C)horizontal; inelastic
• D)downward-sloping; inelastic

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Definitions:

Availability Heuristic

An instinctive heuristic that uses the readily accessible instances that occur to someone as they assess a distinct theme, notion, strategy, or judgement.

Unusual Uses Test

An assessment of creativity that asks individuals to list as many uses as possible for a common object within a given time frame.

Remote Associates Test

A creativity test that measures the ability to see relationships between seemingly unrelated words and to generate a word that is linked to all three.

Divergent Thinking

A thought process or method used to generate creative ideas by exploring many possible solutions, emphasizing spontaneity and non-linear approaches.