According to the Austrian view of the business cycle, expansionary monetary policy that pushes the interest rate to an artificially low level will
A) lead to an increase in long-term investments like houses and office buildings without generating the savings that will be required for their purchase in the future.
B) lead to a reduction in long-term investments like houses and office buildings that will quickly throw the economy into a recession.
C) lead to an increase in long-term investments like houses and office buildings that will enhance the long-term growth of the economy.
D) lead to a reduction in investment, but there will be no impact on output, employment or the general level of prices.
Correct Answer:
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