The interest-rate-based approach to the monetary policy transmission mechanism says that a change in the money supply influences aggregate demand by
A) a change in interest rates, which changes investment.
B) a change in interest rates, which changes the money supply.
C) leading to shifts of the short-run aggregate supply curve.
D) changing consumer consumption behavior as they adjust to a change in the number of dollars available.
Question 2
Arguments against the balanced budget amendment include all of the following EXCEPT
A) a balanced budget amendment would turn control of the federal budget over to the Judicial Branch.
B) a balanced budget amendment would induce Congress to issue more mandates to states to increase spending.
C) a balanced budget amendment would reduce the taxation burden on future generations.
D) a balanced budget amendment would limit Congress from using fiscal policy during a recession.
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