Suppose we have normally-sloped IS and LM curves intersecting at point A. Then a monetary policy change shifts the LM curve to the right. Directly below point A we find a point on the new LM curve that shows us
A) where the new IS-LM equilibrium occurs.
B) how much the interest rate must fall to raise planned expenditures to the new equilibrium income.
C) how much the interest rate must fall to by itself raise the demand for money by as much as the money supply has decreased.
D) how much income must rise to by itself raise the demand for money by as much as the money supply has increased.
E) how much the interest rate must fall to by itself lower the demand for money by as much as the money supply has decreased.
C
You might also like to view...
If the trade line that passes through the production point on the PPC has a slope that is shallower than the slope of the PPC at the same point, then
A) the country can get greater gains from trade if it moves production away from the vertical axis. B) the country can get greater gains from trade if it moves production toward the vertical axis. C) the country cannot improve on its gains from trade. D) There are no gains from trade in this example. E) There is not enough information to tell how it can improve its gains from trade.
One of the major weaknesses of the Federal Reserve Bank of St. Louis econometric model was that it
A) was large and cumbersome. B) was limited to analyzing an economy with substantial unemployment. C) did not specify the categories of private spending that were affected by monetary policy. D) included a government spending multiplier that was clearly too high.
Which of the lines represent the structural stagnation's assumption about trend growth?
A. 3 percent trend B. 2.25 percent trend C. Actual D. It is not represented
The sum of the current account, the capital account, and the official reserve transaction account is
A) always positive. B) always negative. C) positive when exports are greater than imports. D) zero.