Compared to the Baseline, the Short-Run Effect of a Monetary

question 65

Multiple Choice

Compared to the baseline, the short-run effect of a monetary policy change to lower inflation is for

• A)consumption and net exports to decline, while investment stays constant.
• B)consumption, investment, net exports, and government purchases to decline.
• C)consumption, investment, and net exports to decline.
• D)consumption and investment to decline while net exports increase.
• E)consumption and net exports to increase while investment falls.