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In the IS-LM Model, a Decrease in Expected Inflation (Or

Question 6

Multiple Choice

In the IS-LM model, a decrease in expected inflation (or an increase in expected deflation) , leads to a(n) :


A) increase in both output and the nominal interest rate.
B) decrease in both output and the nominal interest rate.
C) increase in output and a decrease in the nominal interest rate.
D) decrease in output and an increase in the nominal interest rate.

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