Author Question: If velocity is more stable than the IS curve, then targeting the money supply a. will be ... (Read 28 times)

EAugust · **on:** Jun 30, 2018

If velocity is more stable than the IS curve, then targeting the money supply

a. will be effective in stabilizing the LM curve and interest rates.
b. has the same effects as targeting interest rates.
c. will be less effective in stabilizing aggregate demand than targeting interest rates.
d. is not possible.

Question 2

Keynes (1941) claimed that government spending during wartime could generate a healthy increase in the demand for output, thus raising employment levels and boosting incomes.

To avoid inflation, physical rationing, monetary measures and other controls were consequently needed. Indicate whether the statement is true or false