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Consider the Monetary Transmission Mechanism

Question 122

Multiple Choice

Consider the monetary transmission mechanism.A relatively steep investment demand curve and a relatively flat money demand curve


A) make it impossible for the Bank of Canada to change the money supply.
B) increase the effectiveness of expansionary monetary policy.
C) imply that large increases in the money supply have little effect on aggregate expenditure.
D) make the money supply a particularly powerful policy instrument.
E) are believed by many monetarists to be realistic descriptions of the economy.

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