Multiple Choice
The economy is in the horizontal portion of the AS curve,there is a liquidity trap,and investment spending is sensitive to changes in the interest rate.According to the Keynesian transmission mechanism,if the money supply increases the interest rate __________,investment spending __________,the AD curve __________ and the price level __________.
A) falls; rises; shifts to the right; rises
B) falls; rises; shifts to the right; remains unchanged
C) does not change; does not change; does not change; does not change
D) does not change; shifts to the left; does not change; rises
E) rises; falls; left; falls
Correct Answer:
Verified
Correct Answer:
Verified
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Q44: <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB6439/.jpg" alt=" -Refer to Exhibit
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