Exam 28: The ISLM Model

If the IS and LM curves in the economy are given by the curves in the following diagram,what would lead to the particular LM curve depicted? How would this affect fiscal and monetary policies?

If the economy is on the LM curve,but is to the left of the IS curve,aggregate output will ________ and the interest rate will ________.

If an economy experiences high interest rates and high unemployment,the ISLM framework predicts that ________ policy has been too ________.

In the money market,a condition of excess supply of money can be eliminated by a ________ in aggregate output or a ________ in the interest rate,everything else held constant.

Which of the following statements concerning Keynesian ISLM analysis is true?

Everything else held constant,if aggregate output is to the left of the LM curve,then there is an excess ________ of money which will cause the interest rate to ________.

In the long-run ISLM model and with everything else held constant,the long-run effect of a fall in net exports is to ________ real output and ________ the interest rate.