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Macroeconomics 10th Edition by William McEachern
Edition 10ISBN: 978-1133188131Macroeconomics 10th Edition by William McEachern
Edition 10ISBN: 978-1133188131 Exercise 2
MONEY AND AGGREGATE DEMAND Would each of the following increase, decrease, or have no impact on the ability of open-market operations to affect aggregate demand? Explain your answer.
a. Investment demand becomes less sensitive to changes in the interest rate.
b. The marginal propensity to consume rises.
c. The money multiplier rises.
d. Banks decide to hold additional excess reserves.
e. The demand for money becomes more sensitive to changes in the interest rate.
a. Investment demand becomes less sensitive to changes in the interest rate.
b. The marginal propensity to consume rises.
c. The money multiplier rises.
d. Banks decide to hold additional excess reserves.
e. The demand for money becomes more sensitive to changes in the interest rate.
Explanation
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Verified
a.Less interest elastic of investment de...
Macroeconomics 10th Edition by William McEachern
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