Which theory assumes that increase in stock of money is directly spent on goods ?
The simple quantity-theory direct-spending channel links excess money balances to goods demand. IS–LM instead emphasises interest/asset adjustment.
Choose your answer
Which theory assumes that increase in stock of money is directly spent on goods ?
Answer and explanation
Correct answer A
The simple quantity-theory direct-spending channel links excess money balances to goods demand. IS–LM instead emphasises interest/asset adjustment.
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UGC NET Economics