Expansionary monetary policy would most like to affect aggregate demand through A. consumption B. investment C....

Question

Question

Expansionary monetary policy would most like to affect aggregate demand through

A. consumption

B. investment

C. net exports

D. aggregate production function

E. none of the above

Answer 1

Answer #1

B. investment

(Expansionary monetary policy will increase money supply which will reduce the interest rate. And thus, investment increases which increases AD.)

Answer 2

Similar Homework Help Questions

If the Fed orders an expansionary monetary policy, describe what will happen to the following variables...

If the Fed orders an expansionary monetary policy, describe what will happen to the following variables relative to what would have happened without the policy: The money supply Interest rates Investment Consumption Net Exports The aggregate demand curve Real GDP The price level
1) of the Central Bank of Kuwait puts in place an expansionary monetary policy, its decision...

1) of the Central Bank of Kuwait puts in place an expansionary monetary policy, its decision is based on A) the fact that the economy is at ful employment B) Expectation of excessive inflation in the future C) the fact that the economy is in an expansion D) Unemployment level is high 2) When the interest rate is set at a very low rate A) the opportunity cost of holding money is very low B) the money demand will shift...
Suppose the Fed wanted to engage in an expansionary monetary policy. Which of the following should...

Suppose the Fed wanted to engage in an expansionary monetary policy. Which of the following should it do? a. Increase the reserve requirement ratio. b. Buy bonds on the open market. c. Sell bonds on the open market. d. Lower taxes. e. Increase the discount rate. The interest rate at which banks can borrow funds from the Fed is known as… a. the federal funds rate. b. the discount rate. c. the prime rate. d. the real interest rate. e....

Which of the following is not a component of Aggregate Demand? Select one: a. Saving b. None of the above 0 C. Net...

Which of the following is not a component of Aggregate Demand? Select one: a. Saving b. None of the above 0 C. Net Exports d. Investment e. Consumption
Refer to figure above, An expansionary fiscal policy would be most effective in raising output with little or no inflation when the aggregate demand curve shifts from

1. Refer to figure above, An expansionary fiscal policy would be most effective in raising output with little or no inflation when the aggregate demand curve shifts from a. AD1 to AD2.b. AD3 to AD4.c. AD5 to AD6.d. AD1 to AD6.
5) If consumption increases by $200 and, in response, equilibrium aggregate expenditure increases by $600, the...

5) If consumption increases by $200 and, in response, equilibrium aggregate expenditure increases by $600, the multiplier is A) 5 B) 0.5.C)2. D) 0.3. 6) When the GDP in Kuwait rises relative to the GDP in other countries, will fall and will fall A) exports; imports B) exports; net exports C) imports; net exports D) net exports; imports 7) An increase in the price level will A) shift the aggregate demand curve to the left. B) shift the aggregate demand...

Beginning from a position of long-run equilibrium, an expansionary monetary policy by the Bank of Canada...

Beginning from a position of long-run equilibrium, an expansionary monetary policy by the Bank of Canada causes A) an increase in the level of potential output B) a fall in the general price level C) an increase in most market interest rates D) aggregate demand for goods and services to exceed potential output E) aggregate demand for goods and services to fall short of potential output
An economy is initially at potential output, in the long run, expansionary monetary policy is expected:...

An economy is initially at potential output, in the long run, expansionary monetary policy is expected: a) not to affect output in the long run b) not to affect output in either the short run or the long run c) to affect output, but only in the long run d) to affect output in both the short run and the long run Which of the following monetary policies likely decreases aggregate demand and, in the short run, output? a) A...
Both monetary policy and fiscal policy affect aggregate demand. Group of answer choices True False

Both monetary policy and fiscal policy affect aggregate demand. Group of answer choices True False

Monetary Policy and Money Markets a. Graph the demand and supply of money at equilibrium. Identify...

Monetary Policy and Money Markets a. Graph the demand and supply of money at equilibrium. Identify the area of excess supply of money and excess demand for money. b.Graph the impact of contractionary monetary policy on Aggregate Demand through monetary policy transmission into the economy- use 3 graphs to illustrate the impact. Graph and list all contractionary monetary policy. c. Explain the transmission of expansionary monetary policy transmission and list all expansionary monetary policy tools d. Define the equation of...