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

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139) In the long-run ISLM model, the long-run effect of an expansionary fiscal policy is to (a) increase real output and the interest rate. (b) decrease real output and the interest rate. (c) increase real output and leave the interest rate unchanged. (d) increase the interest rate and leave real output unchanged. (e) not change either real output or the interest rate. Answer: D Question Status: New Chapter 24 Monetary and Fiscal Policy in the ISLM Model 889 140) In the long-run ISLM model, the long-run effect of a contractionary fiscal policy is to 141) In the long-run ISLM model, the long-run effect of a cut in government spending is to 142) In the long-run ISLM model, the long-run effect of a tax cut is to 143) In the long-run ISLM model, the long-run effect of an autonomous increase in investment 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: C Question Status: New 144) In the long-run ISLM model, the long-run effect of a fall in net exports is to
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890 Frederic S. Mishkin • Economics of Money, Banking, and Financial Markets, Seventh Edition
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