Which of the following explains why the AD curve is downward sloping?
a. a lower price level forces the government to reduce taxes, shifting the IS curve to the right and increasing income.
b. A lower price level forces the central bank to increase the money supply, shifting the LM curve to the right and increasing income.
c. A lower price level increases real money balances, shifting the LM curve to the right and increasing income.
d. none of the above are correct.
C
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The monopolist faces a:
A. perfectly elastic demand curve. B. downward sloping demand curve. C. perfectly inelastic demand curve. D. perfectly elastic supply curve.
Imagine that Odyssey National is a brand new bank, and that its required reserve ratio is 10 percent. If it accepts a $1,000 deposit, then its excess reserve balance will be:
A. $0. B. $90. C. $100. D. $900.
Which part of the following equation represents open economy effects?
AE ? C + I + G + (X – M) a. C b. I c. G d. (X – M)
when the Fed sells US gov securities to a bank the Fed
What will be an ideal response?