Part 1. Keynesian theory argues that
a. decreases in the money supply lead to increases in the interest rate which increases investment which increases the level of real GDP.
b. increases in the money supply lead to decreases in the interest rate which increases investment which increases the level of real GDP.
c. increases in the money supply lead to decreases in the interest rate which decreases investment which decreases the level of real GDP.
d. increases in the money supply cause consumers to spend more which reduces the unemployment rate and therefore increases real GDP.
Part II Both Keynesians and monetarists agree that monetary policy works by shifting aggregate supply.
a. true
b. false
Part 1. Keynesian theory argues that
a. decreases in the money supply lead to increases in the interest rate which increases investment which increases the level of real GDP.
b. increases in the money supply lead to decreases in the interest rate which increases investment which increases the level of real GDP.
c. increases in the money supply lead to decreases in the interest rate which decreases investment which decreases the level of real GDP.
d. increases in the money supply cause consumers to spend more which reduces the unemployment rate and therefore increases real GDP.
Part II Both Keynesians and monetarists agree that monetary policy works by shifting aggregate supply.
a. true
b. false
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