Suppose the Fed reduces the money supply in the current period with no other policy change implemented or anticipated. This policy action will cause which of the following shifts in the IS and/or LM curves in the current period?
A) IS left; LM up
B) IS right; LM up
C) no shift in IS; LM up
D) IS left; LM down
E) IS right; LM down
C
You might also like to view...
A public highway looks like a collective consumption good because there is very little traffic on it and zero congestion. Hence the marginal cost of an additional car is zero
Which of the following statements best describes why we should not assume that the road would always be a collective consumption good? a. The lack of congestion could be the result of government overproduction. b. The lack of congestion could be because of its low speed limit. c. The lack of congestion could be because of excessive police ticketing. d. The lack of congestion is because of the lower cost of alternative means of travel.
Two cities A&B are deciding upon joint pollution laws. Right now they both face identical prices for their housing. If they decide that city A is to be a pollution free city "Clean town" and all the factories would locate in city B "Smogville", in the long run, we expect to see
a. Asthmatics moving to Smogville b. Poorer families moving to Cleantown c. Residents in both the cities relocating based on their tolerance for pollution d. Residents in both the cities being worse off
Economic growth and development in LDCs are low because many of them lack:
a. saving. b. infrastructure. c. a political environment favorable to growth. d. All of these.
A reason why the CPI overstates the cost of living is it
A. makes no attempt to ascertain what average people buy. B. makes no attempt to update the market basket. C. only measures the effects of inflation on the poor. D. inadequately deals with updates in product lines for existing goods.