Which of the Following Statements Is Correct

question 52

Multiple Choice

Which of the following statements is correct?

• A) Because in practice few borrowers are bank-dependent, the bank lending channel is of little real-world importance.
• B) In the interest rate channel, an expansionary monetary policy may cause a leftward shift in the AD curve.
• C) In the bank lending channel, an expansionary monetary policy can increase output in the short run even if it does not result in a decrease in the real interest rate.
• D) In the interest rate channel, an expansionary monetary policy affects spending but not output.

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Definitions:

Trust

A legal arrangement where one party holds assets on behalf of another, or confidence in the reliability and integrity of a person or entity.

Interstate Commerce Commission

A regulatory agency in the United States established to oversee railroad operations and later expanded to oversee other modes of transportation.

Deregulation

The process of removing or reducing state regulations, typically in the economic sphere to encourage more competition within the industry.

Airlines Industry

An industry composed of companies that provide air transport services for traveling passengers and freight.