Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. economics
  3. what are the factors that affect the effectiveness

What are the factors that affect the effectiveness of monetary and fiscal policy?

80.2K

Verified Solution

Question

Economics

What are the factors that affect the effectiveness of monetaryand fiscal policy?

Answer & Explanation Solved by verified expert
3.6 Ratings (414 Votes)
The factor which causes monetary policy ineffectiveness occurs in the third stage of the transmission mechanism namely changes in aggregate spending or demand in response to interest rate changes This happens when interest rate changes have negligible effects on planned autonomous spending especially investment spending This condition arises when business companies are so pessimistic about potential prospects of profit making that they are reluctant to pursue any more investment in response to lower interest rates As a result    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Advance Math
1.2K views

The latitude of any location on Earth is the angle formed by the two rays down from...

Psychology
1.2K views

what are the pros and cons of discretionary parole and mandatory release?

Physics
1.2K views

15 An imaginary graph is plotted betwee potential and distance then E electric fiel A...

Statistics
1.2K views

cles The company that manufactures ballpoint pens sele samples of pens on each of 18...

Algebra
1.2K views

63 Which of the following is a root of x 7x 4x 28 A 4...

Accounting
1.2K views

Chocolate Worid purchases chocolate liquor base and processes it up to the split-off point where...

Accounting
1.2K views

how is it possible that organizations with qualified managers still fail to achieve their goals...

Accounting
1.2K views

I am making a proposal to my university about trying to get textbooks for free...

Accounting
1.2K views

Chapter 13 Problems Saved Help Save & Exit Submit Check my work 2 Wendell's Donut...

Accounting
1.2K views

You should turn interes in ONE Esed document, financial formulas itt Exeed to show work...

Accounting
1.2K views

1. Company A has provided you with the following information for the month of October...

Accounting
1.2K views

A company exchanged old equipment and $17,200 cash for similar equipment. The book value and...