For Monetary Policy to Be Effective in Changing Planned Investment

question 74

Multiple Choice

For monetary policy to be effective in changing planned investment spending,

• A)interest rates must not be responsive to changes in the money supply
• B)interest rates must be sensitive to changes in Gross Domestic Product
• C)investment must be sensitive to changes in interest rates
• D)investment must be sensitive to changes in the spending multiplier
• E)the spending multiplier must be stable

---

Definitions:

Inefficiencies

The lack of effectiveness or productivity in a system, process, or mechanism, leading to waste or the failure to achieve potential output.

Bureaucracies

Complex organizations structured hierarchically, governed by formal rules and procedures, typically within government or large institutions.

Leadership Style

refers to the approach and manner in which a leader guides, motivates, and manages their team or organization.

Bureaucratic Performance

Refers to the efficiency and effectiveness with which government bureaucracies and agencies execute policies and provide services.