In the liquidity-preference model the slope of the money supply curve is: a)hori
ID: 2496518 • Letter: I
Question
In the liquidity-preference model the slope of the money supply curve is: a)horizontal, reflecting the assumption that the Federal Reserve completely controls the supply of money. b)vertical, reflecting the assumption that the Federal Reserve does not completely control the supply of money. c)horizontal, reflecting the assumption that the Federal Reserve does not completely control the supply of money. d)vertical, reflecting the assumption that the Federal Reserve completely controls the supply of money. This assumption is: a)not very accurate. b)generally accepted. C)impossible to evaluate. d)very accurate.
Explanation / Answer
option C is correct.
money supply will be controlled by federal reserve, but not totally it controls. it frame some regulations, based on the regulations variations happens in the economy.
the assumption is generally accepted.
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