Explore BrainMass
Share

Money and Aggregate demand

14. (Money and Aggregate Demand) Would each of the following increase, decrease, or have no impact on the ability of open-market operations to affect aggregate demand?
Explain your answer.
a. Investment demand becomes less sensitive to changes in the interest rate.
b. The marginal propensity to consume rises.
c. The money multiplier rises.
d. Banks desire to hold additional excess reserves.
e. The demand for money becomes more sensitive to changes in the interest rate.

© BrainMass Inc. brainmass.com July 23, 2018, 4:05 am ad1c9bdddf

Solution Preview

14.
a. It will have less impact on aggregate demand as investment demand will change in less proportion than change in open market ...

Solution Summary

This discusses the concept of Money and Aggregate demand

$2.19