Keynesian economists argue that monetary policy works, through its effects on:

Question

Quizplus · Accepted Answer

Keynesian economists argue that monetary policy can be effective through its influence on interest rates, which in turn affect the level of investment in the economy. Thus, choice C is the most accurate answer as it identifies the main transmission mechanism through which monetary policy affects economic activity. Choices A, B, and D are incorrect because they do not accurately capture the key channels through which monetary policy is thought to operate according to Keynesian theory.

Keynesian Economists Argue That Monetary Policy Works, Through Its Effects