If Money Demand Does Not Depend on the Interest Rate

question 74

Multiple Choice

If money demand does not depend on the interest rate, then the LM curve is ______ and ______ policy has no effect on output.

• A) horizontal; fiscal
• B) vertical; fiscal
• C) horizontal; monetary
• D) vertical; monetary

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Definitions:

Direct Investment

The purchase or establishment of a controlling interest in foreign businesses by a company or individual, often involving significant ownership of a stake or property.

Scanning

The process of analyzing the environment to identify changes or trends that may affect an organization's future.

Global Marketplace

The global marketplace encompasses the worldwide economic environment where goods, services, currencies, and information are bought and sold across national borders.

Global Channel

Distribution networks that connect producers and consumers across international borders, facilitating the global trade of goods and services.