In the islm framework an expansionary fiscal policy

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80) In the ISLM framework, an expansionary fiscal policy causes aggregate output to _____ and the interest rate to _____. (a) increase; increase (b) increase; decrease (c) decrease; decrease (d) decrease; increase Answer: A Question Status: Previous Edition 81) In the ISLM framework a contractionary fiscal policy causes aggregate output to _____ and the interest rate to _____. Chapter 24 Monetary and Fiscal Policy in the ISLM Model 877 82) In the case of an expansionary _____ policy, the interest rate rises, while in the case of an expansionary _____ policy, the interest rate falls. 83) Aggregate output and the interest rate are _____ related to government spending and are _____ related to taxes. 84) An increase in spending that results from expansionary _____ policy causes the interest rate to _____. (a) fiscal; rise (b) fiscal; fall (c) incomes; rise (d) incomes; fall Answer: A Question Status: Previous Edition 85) Despite an expansionary monetary policy, an economy experiences a recession. The recession could occur in spite of the rightward shift of the LM curve if 86) If an economy experiences high interest rates and high unemployment, the ISLM framework predicts that ______ policy has been too _____ .
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878 Frederic S. Mishkin • Economics of Money, Banking, and Financial Markets, Seventh Edition 87) Which of the following statements concerning Keynesian ISLM analysis are true?
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