Multiple Choice
If we have a normal IS-curve but a horizontal LM-curve,
A) fiscal policy is the most effective way to reduce unemployment
B) fiscal policy is at its weakest in reducing unemployment
C) monetary policy can aid fiscal policy in reducing unemployment
D) monetary policy is the most effective way to reduce unemployment
E) neither fiscal nor monetary policy is effective in reducing unemployment
Correct Answer:

Verified
Correct Answer:
Verified
Q6: In an IS-LM model, if net exports
Q7: The LM-curve is vertical when<br>A)the interest elasticity
Q8: In which country did nominal interest rates
Q9: In a normal IS-LM framework, crowding out
Q10: Assume the government wants to increase the
Q12: When the government employs a "tight fiscal
Q13: An interesting aspect of the recession of
Q14: The transmission mechanism<br>A)is the process by which
Q15: Expansionary fiscal policy can be successful without
Q16: Crowding out<br>A)does not occur in the liquidity