IGIDR - MACRO

classic Classic list List threaded Threaded
2 messages Options
Reply | Threaded
Open this post in threaded view
|

IGIDR - MACRO

MomoChan
I marked (3) but the answer scheme says (2).
Please help withe explaination of why (b) is true and (a) is not .

Reply | Threaded
Open this post in threaded view
|

Re: IGIDR - MACRO

get.the.lens.right
When Money Supply increases the interest rate should fall >> Positive effect on Investment. Therefore a cannot be an option.
As for b, higher investment leads to higher output and employment hence (due to high unemployment).
Hence b and c >> Option (2)