1. For a hypotetical conditions, indicate whether the policymaker would have a preference for fiscal policy or monetrary policy. Explain your answers.
a. Investment is relatively responsive to changes in interest rates
b. The demand for money is unaffected by the interest rate
c. Investment is relatively rsponsive to changes in the interest rate, and the demand for money is unaffected by the interst rate
d. The demand for money is relatively responsive to changes in interest rate, and investment is relatively unresponsive to changes in interest rate.
e. İnvestment is completevly crowded out when taxes are cut or goverment spendind is increased.