In figure 24 2 the economy moves from point 3 to

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115) In Figure 24-2, the economy moves from point 3 to point 4 whenever (a) both government spending and the money supply increase. (b) both taxes and the money supply increase. (c) both government spending and taxes increase. (d) either (a) or (b) occurs. Answer: A Question Status: Previous Edition 116) In Figure 24-2, the economy moves from point 4 to point 3 whenever 117) In Figure 24-2, the economy moves from point 1 to point 2 whenever 118) In Figure 24-2, the economy moves from point 1 to point 2 whenever 119) In Figure 24-2, the economy moves from point 4 to point 3 whenever (a) government spending increases and the money supply declines. (b) taxes increase and the money supply declines. (c) government spending declines and the money supply increases. (d) both government spending and the money supply increase. Answer: B Question Status: Revised Chapter 24 Monetary and Fiscal Policy in the ISLM Model 885 120) In Figure 24-2, the economy moves from point 1 to point 2 whenever 121) If the quantity of money demanded is not affected by changes in the interest rate, the LM curve is _____ and fiscal policy will be _____. 122) The LM curve will be vertical and fiscal policy ineffective when
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