Monetary stimulus will fail if
A)Banks are reluctant to lend money.
B)The investment demand curve is fairly flat.
C)The money demand curve is fairly steep.
D)Consumers begin to spend more.

Question

Quizplus · Accepted Answer

If banks are reluctant to lend money, monetary stimulus efforts will not be effective. When banks do not lend, businesses and consumers are unable to access the funds they need to invest or spend, ultimately slowing down economic growth.

Monetary Stimulus Will Fail If