2 is not affected by the interest elasticity of

[2] is not affected by the interest elasticity of investment demand.
[3] shows how changes in the monetary sector is transmitted to the financial sector.
[4] explains how changes in interest rates influence real variables in the economy.
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4.6 The correct alternatve is (4)
4. Correct. The monetary transmission mechanism describes how changes in the monetary
sector are transmited to the real sector of the economy.
4.7 Which one of the following statements about lags is correct?
[1] The decision lag is shorter for fiscal policy than for monetary policy.
[2] The implementation lag is extremely short for fiscal policy and long for monetary
policies.
[3] The recognition lag is the same for fiscal and monetary policy.
[4] The impact lag is shorter for monetary policy than for fiscal policy.
4.7 The correct alternative is (3)
The recognition lag is the same for fiscal and monetary policy.
4.8 Which of the following statements are correct?
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c. Nominal values are obtained by dividing the real values by the price level.
[1] All the statements are correct.
[2] a and b
[3] a and c
[4] b and c
[5] c
4.8 The correct alternative is (2)
4.9 Which of the following statements are correct?
[1] If the inflation rate is lower than the nominal interest rate, it is likely that wealth will be
redistributed from the borrower to the lender.
4.9 The correct alternative is (1)
If the inflation rate is lower than the nominal interest rate, the real interest rate is positive and
wealth will be redistributed from the borrower to the lender.
4.10 During inflation, government realises increased revenue from taxation known as
[1] fiscal income.
[2] fiscal surplus.
[3] fiscal deficit.
[4] fiscal dividend.
4.10 The correct alternative is (4)
During inflation, government realises increased revenue from taxation known as fiscal
dividend.
4.11 Which of the following statements are correct ?