4. 5. "The effectiveness of expansionary monetary policy is largely dependent on sensitivity of investment function to i
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4. 5. "The effectiveness of expansionary monetary policy is largely dependent on sensitivity of investment function to i
statement. "An increase in government spending causes equilibrium in the money market to be disturbed and consequently affects the goods market. As a result, income increases but not by full amount". Describe this situation clearly.
4. 5. "The effectiveness of expansionary monetary policy is largely dependent on sensitivity of investment function to interest rates." Using IS-LM analysis, explain this