Monetary policy is expected to influence aggregate demand, output and employment through its effect on:
A) consumption expenditure.
B) investment expenditure.
C) net exports.
D) all of the above.

Question

Quizplus · Accepted Answer

Monetary policy affects aggregate demand, output, and employment through its influence on consumption expenditure (by affecting disposable income and interest rates), investment expenditure (by influencing borrowing costs and investment returns), and net exports (through its impact on exchange rates and thus the competitiveness of a country's goods and services abroad).

Monetary Policy Is Expected to Influence Aggregate Demand, Output and Employment