"A lower price level may lower the interest rate, but investment demand may not respond to this." This is a statement a __________ economist might make as an explanation of why the economy __________ pull out of a recession.

Question

Quizplus · Accepted Answer

Keynesian economists argue that in some situations, lowering interest rates may not be enough to stimulate investment and pull the economy out of a recession, due to factors like low consumer demand or uncertainty.

"A Lower Price Level May Lower the Interest Rate, but Investment