If there is an exogenous decrease in investment spending, Monetarists argue that there would be little or no effect on real output because the interest rate would __________, investment would __________, saving would __________, and consumption would __________.
A) decline; increase; increase; decrease
B) decline; increase; decrease; increase
C) rise; decrease; decrease; increase
D) rise; decrease; increase; increase

Question

Quizplus · Accepted Answer

Monetarists believe that a decrease in investment spending would lead to a decline in interest rates, which would then encourage an increase in investment and consumption, while saving would decrease.

If There Is an Exogenous Decrease in Investment Spending, Monetarists