Exhibit: IS-LM Fiscal Policy Based on the graph, starting from equilibrium at interest rate r1 and income Y1, an increase in government spending would generate the new equilibrium combination of interest rate and income:

A) r2, Y2 B) r3, Y2 C) r2, Y3 D) r3, Y3 A) r2, Y2 B) r3, Y2 C) r2, Y3 D) r3, Y3

Exam 12: Aggregate Demand Ii: Applying the Islm Model

Exhibit: IS-LM Fiscal Policy Based on the graph, starting from equilibrium at interest rate r₁ and income Y₁, an increase in government spending would generate the new equilibrium combination of interest rate and income:

(Multiple Choice)

4.8/5

(46)

Question 41

If the IS curve is given by Y = 1,700 - 100r, the money demand function is given by (M/P)^d = Y - 100r, the money supply is 1,000, and the price level is 2, then if the money supply is raised to 1,200, equilibrium income rises by:

(Multiple Choice)

4.8/5

(36)

Question 42

What are shocks? How do shocks respond to the IS and LM curves?

(Essay)

4.7/5

(43)

Question 43

If the short-run IS-LM equilibrium occurs at a level of income below the natural level of output, then in the long run the price level will _, shifting the _ curve to the right and returning output to the natural level.

(Multiple Choice)

4.8/5

(27)

Question 44

One explanation for the impact of expected price changes on the level of output is that an increase in expected deflation _ the nominal interest rate and _ the real interest rate, so that investment spending declines.

(Multiple Choice)

4.8/5

(49)

Question 45

An increase in the money supply shifts the _ curve to the right, and the aggregate demand curve _.

(Multiple Choice)

4.9/5

(34)

Question 46

If the demand function for money is M / P = 0.5Y - 100r, then the slope of the LM curve is:

(Multiple Choice)

4.9/5

(40)

Question 47

What are the spending hypothesis and monetary hypothesis? Illustrate your answer with examples.

(Essay)

4.9/5

(41)

Question 48

An increase in investment demand for any given level of income and interest rates-due, for example, to more optimistic "animal spirits"-will, within the IS-LM framework, _ output and _ interest rates.

(Multiple Choice)

4.9/5

(36)

Question 49

A decrease in the price level shifts the _ curve to the right, and the aggregate demand curve _.

(Multiple Choice)

4.9/5

(32)

Question 50

When an economy expands its monetary and fiscal policies, how is the aggregate demand curve affected?

(Essay)

4.8/5

(41)

Question 51

Investment depends on the _ interest rate, and money demand depends on the _ interest rate.

(Multiple Choice)

4.9/5

(28)

Question 52

Policymakers are contemplating undertaking either an increase in government spending or an increase in the money supply. Either policy is forecast to have the same impact on income in the short run. Use the IS-LM model to compare the impact on consumption and investment of the two policy alternatives.

(Essay)

4.9/5

(27)

Question 53

Economists who believe that monetary policy is more potent than fiscal policy argue that the:

(Multiple Choice)

4.9/5

(33)

Question 54

The economic slowdown in Canada in 2014 can be explained in part by a decline in investment and exports. Both of these shocks can be represented in the IS-LM model by shifting the _ curve to the _.

(Multiple Choice)

4.8/5

(38)

Question 55

The reason that the income response to a fiscal expansion is generally less in the IS-LM model than it is in the Keynesian-cross model is that the Keynesian-cross model assumes that:

(Multiple Choice)

4.8/5

(36)

Question 56

A liquidity trap occurs when:

(Multiple Choice)

4.8/5

(34)

Question 57

An increase in government spending raises income:

(Multiple Choice)

4.8/5

(34)

Question 58

An economic change that does not shift the aggregate demand curve is a change in:

(Multiple Choice)

4.8/5

(34)

Question 59

To stabilize falling prices in 1930, what did Pigou suggest?

(Essay)

4.7/5

(33)

Question 60

Showing 41 - 60 of 92

Exhibit: IS-LM Fiscal Policy Based on the graph, starting from equilibrium at interest rate r₁ and income Y₁, an increase in government spending would generate the new equilibrium combination of interest rate and income:

If the IS curve is given by Y = 1,700 - 100r, the money demand function is given by (M/P)^d = Y - 100r, the money supply is 1,000, and the price level is 2, then if the money supply is raised to 1,200, equilibrium income rises by:

What are shocks? How do shocks respond to the IS and LM curves?

If the short-run IS-LM equilibrium occurs at a level of income below the natural level of output, then in the long run the price level will _, shifting the _ curve to the right and returning output to the natural level.

One explanation for the impact of expected price changes on the level of output is that an increase in expected deflation _ the nominal interest rate and _ the real interest rate, so that investment spending declines.

An increase in the money supply shifts the _ curve to the right, and the aggregate demand curve _.

If the demand function for money is M / P = 0.5Y - 100r, then the slope of the LM curve is:

What are the spending hypothesis and monetary hypothesis? Illustrate your answer with examples.

An increase in investment demand for any given level of income and interest rates-due, for example, to more optimistic "animal spirits"-will, within the IS-LM framework, _ output and _ interest rates.

A decrease in the price level shifts the _ curve to the right, and the aggregate demand curve _.

When an economy expands its monetary and fiscal policies, how is the aggregate demand curve affected?

Investment depends on the _ interest rate, and money demand depends on the _ interest rate.

Economists who believe that monetary policy is more potent than fiscal policy argue that the:

The economic slowdown in Canada in 2014 can be explained in part by a decline in investment and exports. Both of these shocks can be represented in the IS-LM model by shifting the _ curve to the _.

The reason that the income response to a fiscal expansion is generally less in the IS-LM model than it is in the Keynesian-cross model is that the Keynesian-cross model assumes that:

A liquidity trap occurs when:

An increase in government spending raises income:

An economic change that does not shift the aggregate demand curve is a change in:

To stabilize falling prices in 1930, what did Pigou suggest?

The Science of Macroeconomics

The Data of Microeconomics

National Income: Where It Comes From and Where It Goes

The Monetary System: What It Is and How It Works

Inflation: Its Causes, Effects, and Social Costs

The Open Economy

Unemployment and the Labour Market

Economic Growth I: Capital Accumulation and Population Growth

Economic Growth II: Technology, Empirics, and Policy

Introduction to Economic Fluctuations

Aggregate Demand I: Building the Islm Model

The Open Economy Revisited: the Mundellfleming Model and the Exchange-Rate Regime

Aggregate Supply and the Short-Run Tradeoff Between Inflation and Unemployment

A Dynamic Model of Economic Fluctuations

Alternative Perspectives on Stabilization Policy

Government Debt and Budget Deficits

The Financial System: Opportunities and Dangers

The Microfoundations of Consumption and Investment

Filters

Exam 12: Aggregate Demand Ii: Applying the Islm Model

Exhibit: IS-LM Fiscal Policy Based on the graph, starting from equilibrium at interest rate r1 and income Y1, an increase in government spending would generate the new equilibrium combination of interest rate and income:

If the IS curve is given by Y = 1,700 - 100r, the money demand function is given by (M/P)d = Y - 100r, the money supply is 1,000, and the price level is 2, then if the money supply is raised to 1,200, equilibrium income rises by:

What are shocks? How do shocks respond to the IS and LM curves?

If the short-run IS-LM equilibrium occurs at a level of income below the natural level of output, then in the long run the price level will _____, shifting the _____ curve to the right and returning output to the natural level.

One explanation for the impact of expected price changes on the level of output is that an increase in expected deflation _____ the nominal interest rate and _____ the real interest rate, so that investment spending declines.

An increase in the money supply shifts the _____ curve to the right, and the aggregate demand curve _____.

If the demand function for money is M / P = 0.5Y - 100r, then the slope of the LM curve is:

What are the spending hypothesis and monetary hypothesis? Illustrate your answer with examples.

An increase in investment demand for any given level of income and interest rates-due, for example, to more optimistic "animal spirits"-will, within the IS-LM framework, _____ output and _____ interest rates.

A decrease in the price level shifts the _____ curve to the right, and the aggregate demand curve _____.

When an economy expands its monetary and fiscal policies, how is the aggregate demand curve affected?

Investment depends on the _____ interest rate, and money demand depends on the _____ interest rate.

Economists who believe that monetary policy is more potent than fiscal policy argue that the:

The economic slowdown in Canada in 2014 can be explained in part by a decline in investment and exports. Both of these shocks can be represented in the IS-LM model by shifting the _____ curve to the _____.

The reason that the income response to a fiscal expansion is generally less in the IS-LM model than it is in the Keynesian-cross model is that the Keynesian-cross model assumes that:

A liquidity trap occurs when:

An increase in government spending raises income:

An economic change that does not shift the aggregate demand curve is a change in:

To stabilize falling prices in 1930, what did Pigou suggest?

The Science of Macroeconomics

The Data of Microeconomics

National Income: Where It Comes From and Where It Goes

The Monetary System: What It Is and How It Works

Inflation: Its Causes, Effects, and Social Costs

The Open Economy

Unemployment and the Labour Market

Economic Growth I: Capital Accumulation and Population Growth

Economic Growth II: Technology, Empirics, and Policy

Introduction to Economic Fluctuations

Aggregate Demand I: Building the Islm Model

The Open Economy Revisited: the Mundellfleming Model and the Exchange-Rate Regime

Aggregate Supply and the Short-Run Tradeoff Between Inflation and Unemployment

A Dynamic Model of Economic Fluctuations

Alternative Perspectives on Stabilization Policy

Government Debt and Budget Deficits

The Financial System: Opportunities and Dangers

The Microfoundations of Consumption and Investment

Filters

Exhibit: IS-LM Fiscal Policy Based on the graph, starting from equilibrium at interest rate r₁ and income Y₁, an increase in government spending would generate the new equilibrium combination of interest rate and income:

If the IS curve is given by Y = 1,700 - 100r, the money demand function is given by (M/P)^d = Y - 100r, the money supply is 1,000, and the price level is 2, then if the money supply is raised to 1,200, equilibrium income rises by:

If the short-run IS-LM equilibrium occurs at a level of income below the natural level of output, then in the long run the price level will _, shifting the _ curve to the right and returning output to the natural level.

One explanation for the impact of expected price changes on the level of output is that an increase in expected deflation _ the nominal interest rate and _ the real interest rate, so that investment spending declines.

An increase in the money supply shifts the _ curve to the right, and the aggregate demand curve _.

An increase in investment demand for any given level of income and interest rates-due, for example, to more optimistic "animal spirits"-will, within the IS-LM framework, _ output and _ interest rates.

A decrease in the price level shifts the _ curve to the right, and the aggregate demand curve _.

Investment depends on the _ interest rate, and money demand depends on the _ interest rate.

The economic slowdown in Canada in 2014 can be explained in part by a decline in investment and exports. Both of these shocks can be represented in the IS-LM model by shifting the _ curve to the _.