Franco Modigliani has found that an expansionary monetary policy can cause stock market prices to ________ and consumption to ________.
A)increase;increase
B)increase;decrease
C)decrease;decrease
D)decrease;increase

Question

Quizplus · Accepted Answer

Modigliani's research shows that when the monetary policy is expansionary, interest rates decrease, causing the stock market prices to increase, and consumers to feel wealthier and more confident, leading to an increase in consumption.

Franco Modigliani Has Found That an Expansionary Monetary Policy Can