The shape of the aggregate demand curve is the most important determinant of the effectiveness of fiscal and monetary policy.

Question

Quizplus · Accepted Answer

The effectiveness of fiscal and monetary policy is influenced by various factors such as the slope of the aggregate supply curve, the state of the economy (e.g., whether it is at full employment or not), and the responsiveness of interest rates and investment to changes in fiscal and monetary policy, not just the shape of the aggregate demand curve.

The Shape of the Aggregate Demand Curve Is the Most