For Monetary Policy to Be Effective in Changing Planned Investment

Multiple Choice

For monetary policy to be effective in changing planned investment spending, _____

A) interest rates must not be responsive to changes in the money supply.
B) interest rates must be sensitive to changes in gross domestic product.
C) investment must be sensitive to changes in interest rates.
D) investment must be sensitive to changes in the price level.
E) interest rates must be sensitive to changes in the price level.