A change in monetary policy affects
A)consumption expenditure,government expenditures on goods and services,and net exports.
B)consumption expenditure,investment,and net exports.
C)investment,government expenditures on goods and services,and net exports.
D)consumption expenditure,productivity,and net exports.
E)government expenditures on goods and services because it affects the government's budget balance.

Question

Quizplus · Accepted Answer

A change in monetary policy can affect consumption expenditure by influencing the interest rates, which can impact borrowing and spending by households. It can also affect investment by influencing the cost of borrowing for businesses. Additionally, changes in monetary policy can affect net exports by influencing the exchange rate of a country's currency. Therefore, choice B is the best answer as it covers all three of these effects.

A Change in Monetary Policy Affects