Keynes's Theory Did Not Endorse the Use of Monetary Policy

question 106

Multiple Choice

Keynes's theory did not endorse the use of monetary policy during the Great Depression because:

• A) at the time,the nominal interest rate was very close to zero.
• B) during the Second World War,the convertibility of the pound sterling into gold was suspended.
• C) under the gold standard,the zero bound on nominal interest rates did not exist.
• D) monetary expansions were impossible under a gold standard.

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