Starting from equilibrium and using the ISLM framework, an increase in investment leads to
A) lower interest rates and higher income.
B) higher interest rates and higher income.
C) lower interest rates and lower income.
D) higher interest rates and lower income.
B
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Monetarists typically favor strong policy measures to fight recession
a. True b. False Indicate whether the statement is true or false
Which of the following would be an example of a transaction later regretted because it was made with incomplete information?
A. Tim bought products from a seller that knew they were defective. B. Larry moved to a new apartment but later decided it was too small for his needs. C. Sue purchased a lottery ticket that did not win her any money. D. All of these are good examples of incomplete information.
The value of an original painting, held as an asset, increased in value by 100 percent from 1970 to 2010. Suppose during the same period average prices in the economy rose by 150 percent. The owner of the painting, relative to those who do not own paintings, experienced a:
A. Higher real income as a result of the wealth effect. B. Higher real income as a result of the price effect. C. Lower real wealth as a result of the wealth effect. D. Lower real income as a result of the income effect.
Which of the following short-run outcomes for monopolistic competition is NOT possible?
A) P = MR = MC. B) P > MC > ATC. C) P = ATC. D) P > ATC.