Suppose that changes in the interest rate have absolutely no effect on the demand for money. The resulting ________ LM curve causes monetary policy to have ________ effect in changing income
A) horizontal, no
B) horizontal, an unusually strong
C) vertical, no
D) vertical, an unusually strong
D
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(I) A monetary policy that results in price stability will encourage the realization of gains from trade and thereby help promote economic growth. (II) High tariffs and restrictive quotas will encourage rapid economic growth
a. I is true; II is false. b. II is true; I is false. c. Both I and II are true. d. Both I and II are false.
In 2011, federal government receipts were approximately
a. $4,000 per person and federal government spending was approximately $8,000 per person, resulting in a budget deficit. b. $8,000 per person and federal government spending was approximately $12,000 per person, resulting in a budget deficit. c. $12,000 per person and federal government spending was approximately $8,000 per person, resulting in a budget surplus. d. $8,000 per person and federal government spending was approximately $4,000 per person, resulting in a budget surplus.