The monetary transmission mechanism that assumes that money supply growth stimulates the economy primarily by encouraging investment is
A) the classical transmission mechanism.
B) pre-Keynesian transmission mechanism.
C) the interest-rate-based transmission mechanism.
D) the post-Keynesian transmission mechanism.
Question 2
If there is a change in the federal funds rate from a target rate due to an increase in the demand for reserves, the Fed can maintain the target by:
A) causing an upward movement along the supply of reserves curve.
B) causing the supply curve of reserves to shift to the left.
C) causing a downward movement along the supply of reserves curve.
D) causing the supply curve of reserves to shift to the right.
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