Based on your understanding of the IS-LM model, graphically illustrate and explain what effect a monetary expansion will have on output, the interest rate, and investment
What will be an ideal response?
An increase in M will cause the LM curve to shift down and the interest rate to fall. As the interest rate falls, firms will increase investment causing an increase in demand and subsequent increase in output. So, the interest rate will fall and Y will rise. I will be higher due to the rise in Y and drop in the interest rate.
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Huey and Steve can grow potatoes or tomatoes. The table above shows the pounds of potatoes and tomatoes Huey and Steve can grow in a week. Based on the table, Steve has a comparative advantage in
A) both potatoes and tomatoes. B) neither potatoes nor tomatoes. C) potatoes. D) tomatoes. E) More information is needed about Huey's comparative advantage in order to determine Steve's comparative advantage.
Refer to Table 16-3. Suppose Julie's marginal cost of providing this service is constant at $7 and she charges each customer according to his or her willingness to pay instead of a uniform price of $7. Which of the following statements is true?
A) Julie has converted the consumer surplus (from a uniform price) into economic profit. B) Julie's has converted the producer surplus (from a uniform price) into consumer surplus. C) Julie is worse off because the demand for her services is reduced. D) Julie's customers are better off because their consumer surplus has increased.
Olson (1971) claims that unions strive for job monopoly to achieve their goals by coercion
Indicate whether the statement is true or false
The official U.S. poverty line for a family is calculated by taking 3 times the annual cost of:
a. public housing. b. basic medical care. c. utilities and transportation. d. a minimal diet.