Early Keynesians viewed monetary policy as influencing aggregate demand solely through its impact on ________ interest rates,which,in turn,affect ________ spending.
A)nominal; consumer
B)nominal; investment
C)real; consumer
D)real; investment

Question

Quizplus · Accepted Answer

Early Keynesians believed that monetary policy affected aggregate demand through its impact on nominal interest rates, which in turn affected investment spending. This view was later expanded to include the real interest rate and its impact on both investment and consumer spending. However, the question specifically asks about the early Keynesian view, which only considered nominal interest rates and investment spending.

Early Keynesians Viewed Monetary Policy as Influencing Aggregate Demand Solely