If investment is not sensitive to changes in the interest rate,then changes in the money supply:
A)will have no effect on interest rates.
B)will have no impact on the quantity of money demanded.
C)will have no effect on the aggregate demand of an economy.
D)will have a major impact on the aggregate demand of an economy.
E)will have a major impact on the price level in an economy.

Question

Quizplus · Accepted Answer

If investment is not sensitive to changes in the interest rate, changes in the money supply will not significantly affect investment levels, thus having minimal direct impact on aggregate demand.

If Investment Is Not Sensitive to Changes in the Interest