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ECON MACRO 5th Edition by William McEachern
Edition 5ISBN: 978-1305659094ECON MACRO 5th Edition by William McEachern
Edition 5ISBN: 978-1305659094 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 d...
ECON MACRO 5th Edition by William McEachern
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