Suppose that the demand for money were to become less sensitive to changes in GDP. You would then expect
A) monetary policy to become less effective and fiscal policy to become more effective.
B) monetary policy to become more effective and fiscal policy to become less effective.
C) no change in the relative effectiveness of either fiscal or monetary policy.
D) both monetary policy and fiscal policy to become more effective.
E) both monetary policy and fiscal policy to become less effective.
Correct Answer:
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