Multiple Choice
Which of the following is NOT consistent with the Keynesian view of policy and a liquidity trap?
A) Monetary stimulus is not effective when interest rates are near zero.
B) Liquidity traps require a policy solution that is opposite to the one that would be used in other situations.
C) Monetary policy affects aggregate demand through its impact on interest rates.
D) Fiscal policy is more effective than monetary policy in addressing a liquidity trap.
Correct Answer:
Verified
Correct Answer:
Verified
Q65: Monetarists recommend that the money supply should
Q66: In the United States, the natural rate
Q67: Which of the following is an example
Q68: An expansionary monetary policy affects a country's
Q69: Business owners often make the mistake of
Q71: An increase in the money supply affects
Q72: When the Federal Reserve reduces the money
Q73: During the early 2000s, the Federal Reserve
Q74: If the Federal Reserve wishes to maintain
Q75: To stabilize an economy, the Keynesian policy