Monetary policy affects real GDP by
A) creating budget surpluses.
B) changing aggregate demand.
C) creating budget deficits.
D) changing aggregate supply.

Question

Quizplus · Accepted Answer

Monetary policy can affect real GDP by changing aggregate demand through interest rate adjustments, money supply changes, and other mechanisms. Creating budget surpluses or deficits may impact fiscal policy but do not directly affect real GDP. Changing aggregate supply is typically influenced by factors such as technology or input costs rather than monetary policy.

Monetary Policy Affects Real GDP by