Neosho County Commur ng.com/ibiscms/mod/ibis/view.php?id=372 1 309 NCCC Home Net

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Neosho County Commur ng.com/ibiscms/mod/ibis/view.php?id=372 1 309 NCCC Home Netflix Kansas Jail and Inmat Imported From IE D KanRoad 2014-59 NCC stion 1 of 24 Incorrect o Incorrect ( Incorrect Incorrect o incorred incorrect .. Incorrect : loomed Sapling Learning Suppose that a central bank pursues expansionary monetary policy by purchasing bonds. Classify each of the variables listed below by the policy's short-run effect upon them. Increase No effect Investment spending Marginal propensity to consume Demand for loanable funds Supply of money Price level The equilibrium interest rate Real GDP Previous Check Answer 0 Next Hint E about US

Explanation / Answer

Investment Spending - Increase.

Marginal propensity to consume - no effect.

Demand for loanable funds - Increase.

supply of money - increases

price level - no effect.

the equilbruim interest rate - decreases

Real GDP - increases.

because, when the central bank pursues expansionary monetary policy of purchasing bond . then the money supply increase in the economy. the banks reserves has been increases. therefore they can lend more at lower interest rate to encourage lending. therefore, the rate of interest rate declines , when interest rate decreases, there will be more investment spending in the economy. and therefore the real GDP also increases.

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