The impact of monetary policy onaggregate demand will be greater the a.flatter t

Question

The impact of monetary policy onaggregate demand will be greater the

a.flatter the demand for real money curve and the steeper theinterest sensitive expenditures curve.

b.steeper the demand for real money curve and the flatter theaggregate expenditure curve.

c.steeper the demand for real money curve and the flatter theinterest sensitive expenditures curve.

d.flatter the demand for real money curve and the interest sensitiveexpenditures curve.

e.steeper the demand for real money curve and the interest sensitiveexpenditures curve.

Explanation / Answer

c. steeper the demand for real money curve and the flatter theinterest sensitive expenditures curve. ~~~~~~~~ On the loanable funds graph, we have steeper demand for realmoney would mean less change in money supply with greater change ininterest rate ~ On the interst sensitive curve, it would mean interest ratewould be more elastic thus does not need to change as much formonetary policy to have an effect ~ *For your reference

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.