If money demand does not depend upon income,then
A)monetary policy cannot have any effect upon the economy.
B)monetary policy will only affect the level of the price level.
C)monetary policy will only affect interest rates.
D)monetary policy will have a larger impact on income.

Question

Quizplus · Accepted Answer

If money demand does not depend upon income, then changes in the money supply or interest rates will not affect the demand for money or overall economic activity. This means that monetary policy cannot have any significant impact on the economy.

If Money Demand Does Not Depend Upon Income,then