According to the traditional interest-rate channel,expansionary monetary policy lowers the real interest rate,thereby raising expenditure on

Question

Quizplus · Accepted Answer

The traditional interest-rate channel states that expansionary monetary policy will lower the real interest rate, making borrowing less expensive for businesses. As a result, businesses will be more likely to invest in fixed capital, leading to an increase in business fixed investment. Therefore, choice A is the best answer.

According to the Traditional Interest-Rate Channel,expansionary Monetary Policy Lowers the Real