If we have a normal IS-curve but a horizontal LM-curve,
A) fiscal policy is the most effective way to reduce unemployment
B) fiscal policy is at its weakest in reducing unemployment
C) monetary policy can aid fiscal policy in reducing unemployment
D) monetary policy is the most effective way to reduce unemployment
E) neither fiscal nor monetary policy is effective in reducing unemployment
Correct Answer:
Verified
Q1: If investment is not very sensitive to
Q3: The transmission mechanism between an open market
Q4: A change in which of the following
Q5: If the Fed undertakes open market sales,
Q6: Fiscal policy is weakest and monetary policy
Q7: Monetary policy becomes more effective as
A)the marginal
Q8: In an IS-LM model, if we assume
Q9: The liquidity trap exists when
A)the IS-curve is
Q10: In the classical case,
A)the fiscal policy multiplier
Q11: If we were in a liquidity trap,
A)investment
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