Monetarists contend that
A)monetary policy affects aggregate demand solely through investment.
B)monetary policy may affect aggregate demand through many channels.
C)a weak link between nominal interest rates and investment spending implies monetary policy ineffectiveness.
D)monetary policy affects aggregate demand solely through consumption.

Question

Quizplus · Accepted Answer

Monetarists argue that monetary policy can affect aggregate demand through a variety of channels, including changes in interest rates, the availability of credit, and the overall level of liquidity in the economy. While they acknowledge that the link between interest rates and investment spending may be weak, they do not claim that monetary policy affects aggregate demand solely through investment or consumption.

Monetarists Contend That