Based on the IS-LM-PC model for a closed economy studied in class, which of the following statements is correct? a) In the medium run monetary policy can only be used to control inflation, but it will not affect production. b) In the medium run, fiscal policy can only help to increase or decrease interest rates, but it will not affect production. c) Both monetary and fiscal policy can't be effectively used to increase production in the short run. d) All of the above.

Based on the IS-LM-PC model for a closed economy studied in class, which of the following statements is correct? a) In the medium run monetary policy can only be used to control inflation, but it will not affect production. b) In the medium run, fiscal policy can only help to increase or decrease interest rates, but it will not affect production. c) Both monetary and fiscal policy can't be effectively used to increase production in the short run. d) All of the above.

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter15: The Debate Over Monetary And Fiscal Policy

Section: Chapter Questions

Problem 8DQ

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