In the AS/AD model, a contractionary monetary policy:

A. reduces investment but increases aggregate demand.
B. increases both investment and aggregate demand.
C. increases investment but reduces aggregate demand.
D. reduces both investment and aggregate demand.

Answer: D

Economics

You might also like to view...

What is the accelerator theory of investment spending?

What will be an ideal response?

View

Economics

Define potential GDP. Under what circumstances does actual real GDP fall short of potential GDP, equal potential GDP, and exceed potential GDP?

What will be an ideal response?

View

Economics