Investment Spending Is Insensitive to Changes in the Interest Rate

question 1

Multiple Choice

Investment spending is insensitive to changes in the interest rate and the SRAS curve is upward sloping.According to a monetarist,an increase in the money supply will __________ Real GDP.According to a Keynesian,an increase in the money supply will __________ Real GDP.

• A) raise; not change
• B) not change; raise
• C) lower; lower
• D) raise; lower
• E) none of the above

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Definitions:

Par Value

The nominal or face value of a bond, stock, or coupon as indicated on a certificate or instrument.

Corporate Charter

A corporate charter is a legal document establishing a corporation and outlining its structure, objectives, and operations as recognized by the state.

Cash Dividend

This is a payment made by a company out of its earnings to shareholders, distributed in the form of cash.

Par Common Stock

The nominal or face value assigned to a share of common stock in the company’s charter.