The Interest-Rate-Based Approach to the Monetary Policy Transmission Mechanism Says

question 94

Multiple Choice

The interest-rate-based approach to the monetary policy transmission mechanism says that a change in the money supply influences aggregate demand by

• A) a change in interest rates, which changes investment.
• B) a change in interest rates, which changes the money supply.
• C) changing consumer consumption behavior as they adjust to a change in the number of dollars available.
• D) leading to shifts of the short-run aggregate supply curve.

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