Answer to Question #126973 in Macroeconomics for hina

Question #126973
explain the relationship between the effectiveness of monetary policy and the intrest elasticity of investment
1
Expert's answer
2020-07-21T15:15:10-0400

The interest rate elasticity of investment demand refers to how sensitive investment level is to changes in the interest rate. Monetary policy, indeed, involves managing the interest rate.

So, the higher is elasticity, the more effective is monetary policy.


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