2010_Econ_110A_%20blanchard%204e%20Ch%205%20HomeworkQuestions-2

2010_Econ_110A_%20blanchard%204e%20Ch%205%20HomeworkQuestions-2

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Econ 110A Ch 5 Homework Questions Please, do not use a calculator or any other devices such as cell phones or computers. 1. Which of the following causes a shift of the LM curve? A. a change in the interest rate. B. a change in taxes. C. a change in the money supply. D. a change in G. 2. A decrease in consumer confidence shifts the ___ curve to the ___. A. IS, right. B. IS, left. C. LM, right. D. LM, left. 3. As a result of the decrease in consumer confidence in question 2, the equilibrium GDP will ___ and the equilibrium interest rate will ___. A. increase, increase. B. increase, decrease. C. decrease, increase. D. decrease, decrease. 4. Assume that investment (I) depends on income (Y) and interest rate ( i ). As a result of the decrease in consumer confidence in question 2, investment A. will increase. B. will decrease. C. may increase or decrease or not change. D. will not change. 5. Which policy mix will increase equilibrium interest rate ( i ) to the largest extent? A. a tax cut and a money supply increase.
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This note was uploaded on 09/29/2010 for the course ECON 110A taught by Professor Laboskey during the Summer '08 term at Alabama.

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2010_Econ_110A_%20blanchard%204e%20Ch%205%20HomeworkQuestions-2

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