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MMLU / Which of the following is a predictable advantage of expansionary monetary…

Problem

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question

Which of the following is a predictable advantage of expansionary monetary policy in a recession?

choices

  1. Decreases aggregate demand so that the price level falls.
  2. Increases aggregate demand which increases real GDP and increases employment.
  3. Increases unemployment but low prices negate this effect.
  4. It keeps interest rates high which attracts foreign investment.

subject

high_school_macroeconomics

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