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Author Question: In the liquidity trap case where the LM schedule is nearly horizontal, a. both monetary and ... (Read 165 times)

tnt_battle

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on: Jun 30, 2018
In the liquidity trap case where the LM schedule is nearly horizontal,
 
  a. both monetary and fiscal policy are highly effective.
  b. monetary and fiscal policy are ineffective.
  c. monetary policy is ineffective and fiscal policy is effective.
  d. fiscal policy is ineffective and monetary policy is effective.

Question 2

If money demand does not depend on the interest rate then
 
  a. the LM curve if vertical and fiscal policy is ineffective.
  b. the LM curve is horizontal and fiscal policy is ineffective.
  c. the LM curve is horizontal and horizontal has no effect on output.
  d. the LM curve is vertical and monetary policy is ineffective.


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shaquita

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Reply #1 on: Jun 30, 2018
Answer to Question 1

C

Answer to Question 2

A


tnt_battle

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Reply 2 on: Jun 30, 2018
Great answer, keep it coming :)

cpetit11

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Reply 3 on: Yesterday
:D TYSM

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