-Refer to Exhibit 15-l.A Keynesian monetary policy to eliminate a recessionary gap can be portrayed as a move between points

Question

Quizplus · Accepted Answer

A Keynesian monetary policy to eliminate a recessionary gap involves increasing the money supply to lower interest rates and stimulate investment and consumption. This would shift the economy from a lower output level (point B) to a higher output level (point C) on the aggregate demand curve.

-Refer to Exhibit 15-L