Economics · Monetary Policy
Under the standard IS-LM framework, monetary policy's relative strength in changing output and managing business cycles increases when there is a:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1larger interest elasticity of investment demand
- 2smaller interest elasticity of money demand✓
- 3lower degree of exchange rate flexibility
- 4higher degree of trade closedness
Correct answer
smaller interest elasticity of money demand
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