Monetary policy has short-run effects on which of the following?
A)the level of output but not its composition
B)both the level and composition of output
C)only the price level
D)only the nominal interest rate, not the real interest rate
E) none of the above

Question

Quizplus · Accepted Answer

Monetary policy can influence both the level and composition of output in the short run by affecting interest rates, which in turn influence investment and consumption decisions, altering both the total output and its distribution across different sectors.

Monetary Policy Has Short-Run Effects on Which of the Following