Exam 7: Keynesian System III: Policy Effects in the Is-Lm Model

If the government raised taxes and reduced government spending in order to reduce the budget deficit,monetary policy could accommodate this policy by

If the central bank increases the money supply at the same time as government spending increases,then:

If interest rates fall without any corresponding change in income,then it is possible according to the IS-LM model that

If the government wanted to reduce interest rates without changing output,it should

An decrease in the velocity of money will shift the

The slope of the LM curve has been shown to depend most crucially on the interest elasticity of

Within the IS-LM curve model,an increase in government spending financed by printing money will always

Within the IS-LM curve model,a decline in expectations would

Changes in all of the following shift the IS curve except

If income falls without any change in interest rates,then according to the IS-LM model it may be true that:

In the IS-LM model,an increase in government spending in the goods market has an impact on the money market because

In the case where the LM schedule is relatively steep and the IS schedule is relatively flat,the most effective policy would be a change in

The effect on the level of income of a given increase in the money stock is

A liquidity trap occurs when the

According to the modern Keynesian view,

Analyze the effects of an increase in expected future profitability in the Keynesian model,making sure to discuss what happens to interest rates and output.Provide graphs to illustrate.

Monetary policy will be

Comparing the simple Keynesian model with the IS-LM model,in the IS-LM model

A simultaneous reduction in both taxes and the money stock will always

Those economists who believe that monetary policy is more powerful than fiscal policy argue that the