Answer to Question #94445 in Macroeconomics for Nomthandazo

Question #94445

in the monetary transmission mechanism...
(1) an increase in the interest rate affects the total production in the economy, but has no effect on the general price level
(2) changes in the average tax rate are the main toll of policy implementation
(3) changes in the interest rate affect only the variables in the monetary sector of the economy
(4) investment spending is negatively relate to the interest rate

Expert's answer

(4) investment spending is negatively relate to the interest rate