n the case where money demand is completely interest insensitive (interest elasticity equals zero), an increase in the quantity of money will a. leave both income and the interest rate unchanged. b. lower the interest rate but leave income unchanged. c. increase income and lower the interest rate. d. increase income but leave the interest rate unchanged.
n the case where money demand is completely interest insensitive (interest elasticity equals zero), an increase in the quantity of money will a. leave both income and the interest rate unchanged. b. lower the interest rate but leave income unchanged. c. increase income and lower the interest rate. d. increase income but leave the interest rate unchanged.
Chapter13: Monetary Policy: Conventional And Unconventional
Section: Chapter Questions
Problem 4TY
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In the case where money demand is completely interest insensitive (interest elasticity equals zero), an increase in the quantity of money will
a.
leave both income and the interest rate unchanged.
b.
lower the interest rate but leave income unchanged.
c.
increase income and lower the interest rate.
d.
increase income but leave the interest rate unchanged.
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