{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Reading Check 3 - In the IS-LM model with fixed prices If...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Question 1 In the IS-LM, with fixed prices. If there is an increase in taxes a. IS will shift to the right. b. IS will shift to the left.* c. LM will shift to the right. d. LM will shift to the left. Question 2 According to the Keynesian Theory (within IS-LM, fixed prices) an exogenous reduction in the money supply is most likely to: Question 3
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: In the IS-LM model with fixed prices. If the demand for money is Md=50+0.2Y-10r, and there is a 10 unit increase in the money supply, then the LM will shift to the right by: a. 10 units b. 50 units* c. 40 units d. 0 units Question 4 The lower the interest rate sensitivity of the demand for money, the a. More effective is fiscal policy and the less effective is monetary policy. b. More effective is monetary policy and the less effective is fiscal policy.* c. Less effective are both monetary and fiscal policy. d. More effective are both monetary and fiscal policy....
View Full Document

{[ snackBarMessage ]}