There Is an Increase in the Money Supply and the Interest

question 90

Multiple Choice

There is an increase in the money supply and the interest rate does not change.This is what happens if

• A) investment is interest-insensitive.
• B) a liquidity trap exists.
• C) activist monetary policy is used instead of nonactivist monetary policy.
• D) wages and prices are flexible.
• E) none of the above

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Definitions:

Utilitarianism

An ethical theory that posits the best action is the one that maximizes utility, usually defined as that which produces the greatest well-being of the greatest number of people.

Virtue Ethics

An ethical theory that emphasizes virtues of mind, character, and sense of honesty as the basis for morality.

Ethics of Care

A normative ethical theory that emphasizes interpersonal relationships and compassion as foundational to moral action.

Psychological Egoism

The theory that suggests that all human actions are motivated by self-interest, even in what seem to be acts of altruism.