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Macroeconomics

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Monetary Policy: Keynesian

MACRO-EKU4D1

A Keynesian will argue that expansionary monetary policy is most effective at increasing investment when which of the following is true?

A

Money demand is less elastic and the investment demand is more elastic.

B

Money demand and investment demand are each more elastic.

C

Money demand and investment demand are each less elastic.

D

Investment demand becomes less elastic and money demand more elastic.