Austrian economists are worried about monetary policy that increases the money supply because An increase in the money supply causes consumers to borrow more - potentially too much more - in the short-run (overconsumption) An increase in the money supply reduces savings and increases future income available for new products An increase in the money supply causes investors to invest in projects that have higher expected rates of return (malinvestment) all of the above are correct
Austrian economists are worried about monetary policy that increases the money supply because An increase in the money supply causes consumers to borrow more - potentially too much more - in the short-run (overconsumption) An increase in the money supply reduces savings and increases future income available for new products An increase in the money supply causes investors to invest in projects that have higher expected rates of return (malinvestment) all of the above are correct
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
138.) Austrian economists are worried about
An increase in the money supply causes consumers to borrow more - potentially too much more - in the short-run (overconsumption)
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An increase in the money supply reduces savings and increases future income available for new products
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An increase in the money supply causes investors to invest in projects that have higher expected
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all of the above are correct |
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