Question
MCQ questions, my answers are bolded. Please explain your answer I have asked these questions for 4th time, still do not have confidence with their
MCQ questions, my answers are bolded. Please explain your answer
I have asked these questions for 4th time, still do not have confidence with their answers
Italics are answers of course hero tutors
2. Short- to medium term fluctuations in the economy (i.e., business cycles) are primarily driven by changes (or shocks) to:
A. Underlying trend growth
B. Aggregate supply
C. Inflation expectations
D. All of the above
E. None of the above
7. Monetary policy tends to be less effective when:
A. Money demand is insensitive to interest rate (?)
B. Investment is sensitive to interest rate
C. The LM curve is steep (?)
D. All of the above
E. None of the above
8. Fiscal policy tends to be less effective when:
A. Money demand is insensitive to interest rate
B. Investment is sensitive to interest rate
C. The IS curve is flat
D. All of the above
E. None of the above
19. Other things equal, the "natural" rate of interest will fall if:
A. Supply of saving falls
B. Household consumption rises
C. Investment demand rises
D. All of the above
E. None of the above
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