AP Macroeconomics Question 185: Answer and Explanation
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9. According to Monetarist theory, when the money supply is changed, the economy is affected
- A. only because a change in the money supply affects interest rates.
- B. in several ways.
- C. because interest rates change and so do many other factors that affect spending.
- D. because many factors that affect spending change, but not interest rates.
- E. but only insignificantly.
Correct Answer: C