An increase in autonomous investment ________
A) increases equilibrium output at any interest rate
B) causes a movement down along the IS curve
C) shifts the IS curve to the left
D) all of the above
E) none of the above
A
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If there was only full-reserve banking:
A. the financial system would work better. B. absolutely no lending using deposits would be able to occur. C. banks would make more money lending deposits. D. The money multiplier would be at maximum.
Suppose Laqueta deposits $10,000 of cash into a checking account at a commercial bank. The immediate effect is
a. a $10,000 decrease in the M1 money supply. b. no change in the M1 money supply, but in the future, the M1 money supply will tend to decrease because the bank now has excess reserves. c. no change in the M1 money supply, but in the future, the M1 money supply will tend to expand because the bank now has excess reserves. d. a $10,000 increase in the M1 money supply.
Which of the following price ceilings would be binding in this market?
A. $14 B. $12 C. $8 D. $10
To close a recessionary gap, the Federal Reserve must ________ real interest rates by ________ the money supply.
A. decrease; increasing B. decrease; decreasing C. increase; decreasing D. increase; increasing