Author Question: In the Keynesian system, an increase in the money stock would a. increase the interest rate, ... (Read 107 times)

michelleunicorn · **on:** Jun 30, 2018

In the Keynesian system, an increase in the money stock would

a. increase the interest rate, which, in turn, would increase aggregate demand and income.
b. decrease the interest rate, which, in turn, would decrease aggregate demand and income.
c. decrease the interest rate, which, in turn, would increase aggregate demand and income.
d. decrease the interest rate but would have no effect on aggregate demand and income.

Question 2

Which of the following would be evidence against rational expectations?

a. unpredictable changes in policy have real effects.
b. new information leads to changes in output.
c. the public never make mistakes with respect to price level predictions.
d. changes in stock prices change much more often than new information becomes available.