Answered

Get reliable answers to your questions at Westonci.ca, where our knowledgeable community is always ready to help. Explore thousands of questions and answers from a knowledgeable community of experts on our user-friendly platform. Explore comprehensive solutions to your questions from knowledgeable professionals across various fields on our platform.

The economy is in the horizontal portion of the AS curve, there is a liquidity trap, and investment spending is sensitive to changes in the interest rate. According to the Keynesian transmission mechanism, if the money supply increases the interest rate __________, investment spending __________, the AD curve __________ and the price level __________. Question 8 options:

Sagot :

Tundexi

Answer:

does not change; does not change; does not change; does not change;

Explanation:

According to the Keynesian transmission mechanism, if the money supply increases the interest rate does not change, investment spending does not change, the AD curve does not change and the price level does not change.

Keynesian maintain that transmission mechanisms are indirect. That is, changes in the money supply affect aggregate demand via changes in interest rates or exchange rates.

We hope our answers were useful. Return anytime for more information and answers to any other questions you have. We hope you found this helpful. Feel free to come back anytime for more accurate answers and updated information. Westonci.ca is here to provide the answers you seek. Return often for more expert solutions.