AP Macroeconomics Question 185: Answer and Explanation

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Question: 185

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