According to Monetarists, an Expansionary Fiscal Policy Is a Weak

Multiple Choice

According to monetarists, an expansionary fiscal policy is a weak stabilization tool because

A) the asset demand for money varies inversely with the rate of interest.
B) government borrowing to finance a deficit will raise the interest rate and reduce private investment.
C) government borrowing will reduce the supply of money in circulation and depress the GDP.
D) government borrowing to finance a deficit will lower interest rates, increase money balances, and lower velocity.