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Subject - Economics:

Macroeconomics

MCQ - 217-4227

Question:

Which of the following could limit the ability of a central bank to conduct expansionary monetary policy?

  1. Money demand is nearly perfectly elastic.
  2. Investment demand is nearly perfectly elastic.
  3. Banks make loans with all excess reserves.
  4. Investment demand is nearly perfectly elastic.
  5. Money supply is nearly perfectly inelastic.

Correct Answer: A

Explanation:

A horizontal money demand curve implies that increasing the money supply does not lower the interest rate. Investment is constant, and AD does not increase.

Record Performance

269 MCQ for effective preparation of the test of Macroeconomics of Economics section.

Read the MCQ statement: Which of the following could limit the ability of a central bank to conduct expansionary monetary policy? , keenly and apply the method you have learn through the video lessons for Macroeconomics to give the answer. Record your answer and check its correct answer and video explanation for MCQ No. 217-4227.

How to Answer

Solve the question for MCQ No. and decide which option (A through D/E) is the best choice to answer the MCQ, then click/tap the blue button to view the correct answer and it explanation.

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