In the long run islm model the long run effect of an

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145) In the long-run ISLM model, the long-run effect of an autonomous fall in consumption expenditure is to (a) increase real output and the interest rate. (b) increase real output and not affect the interest rate. (c) not affect real output and increase the interest rate. (d) not affect real output and reduce the interest rate. (e) not affect either real output or the interest rate. Answer: D Question Status: New 146) In the long-run the ISLM model predicts that 147) In the long run there is complete crowding out. This means that 148) The relationship between the price level and the quantity of aggregate output for which the goods and money markets are in equilibrium is called 149) If the price level increases, other things equal, the _____ curve shifts to the _____. (a) IS; right (b) IS; left (c) LM; left (d) LM; right Answer: C Question Status: Previous Edition Chapter 24 Monetary and Fiscal Policy in the ISLM Model 891 150) Other things equal, a decrease in the price level will 151) In deriving the aggregate demand curve a _____ in the price level leads to a(n) _____ in the real money supply because the nominal quantity of dollars can purchase _____ goods and services. 152) In deriving the aggregate demand curve a _____ price level _____ the money supply in real terms, raises interest rates, and _____ the equilibrium level of aggregate output.
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