Sample01.pdf - Multiple Choice Questions(14 questions x 5...

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Multiple Choice Questions (14 questions x 5 points = 70 points) 1.The IS curve describes the __________ relationship between __________ and __________. a. negative; tax rate; investment b. positive; interest rate; output c. positive; tax rate; government expenditure d. negative; interest rate; output e. negative; interest rate; money supply ANS: D 2. According to the IS curve, when interest rates rise, __________ and __________. C 3. If the real interest rate is less than the marginal product of capital, firms are better off D

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