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Suppose the Fed Increases the Money Supply in the Current

Question 7

Multiple Choice

Suppose the Fed increases the money supply in the current period with no other policy change implemented or anticipated.This policy action will cause which of the following shifts in the IS and / or LM curves in the current period?


A) IS left; LM up
B) IS right; LM up
C) no shift in IS; LM down
D) IS left; LM down
E) IS right; LM down

Correct Answer:

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