Suppose policy makers implement an unexpected fiscal expansion Further assume

Suppose policy makers implement an unexpected fiscal

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7) Suppose policy makers implement an unexpected fiscal expansion. Further assume that monetary policy is expected to keep interest rates constant in response to this unexpected fiscal expansion. Given this information, we would expect that A) stock prices will rise. B) stock prices will remain constant. C) this policy will have an ambiguous effect on stock prices. D) the effect on stock prices will depend on the slope of the IS curve. 8) An expected tax cut will tend to cause 9) Suppose households unexpectedly increase consumption. Which of the following will occur as a result of this unexpected increase in consumption? 10) Assume that the one-year interest rate is on the vertical axis of the IS-LM model and that the yield curve is initially upward sloping. Suppose that financial market participants expect that the central bank will pursue a monetary contraction in the future. Given this information, we would expect which of the following to occur?
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