In the is lm model equilibrium income can be affected

  • De La Salle Lipa
  • ECON 101
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  • fmontserrat
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Financial Markets & Institutions
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Chapter 2 / Exercise 21
Financial Markets & Institutions
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48)In the IS-LM model, equilibrium income can be affected byA)fiscal policy alone.B)monetary policy alone.C)both fiscal and monetary policy.D)neither monetary nor fiscal policy.
49)Which variable is assumed to remain exogenous in all the models constructed in Chapters 3and 4?
50)The money supply consists of
51)In the early stages of macroeconomic model building, the money supply is regarded as a policy __________ that is under _______ control by the Federal Reserve.
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Chapter 2 / Exercise 21
Financial Markets & Institutions
Madura
Expert Verified
52)"Real money balances" refers toA)the currency part of the total money supply.B)the money supply divided by the price level.C)the money supply times one minus the interest rate.D)the non-interest-earning part of the money supply.
53)An increase in real GDP causes the demand for real money balances to
54)On a money demand diagram with the interest rate on the vertical axis, the real money balance demand schedule would be a vertical line under the assumption that
55)Money is assumed to earn
56)Holding nonmonetary assets and converting them to money when necessary is justifiable solong asA)nonmonetary assets pay an interest rate above that available on money.B)nonmonetary assets pay an interest rate below that available on money.C)money, and not nonmonetary assets, are generally used in transactions.D)money and nonmonetary assets are both used as bartering items.
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