the economics of money, banking, and financial markets

700 #

© 2014 Pearson Canada Inc.#

18. 
    

    An increase in investment spending because companies become more optimistic about
    investment profitability causes the aggregate demand function to shift up, the equilibrium level
    of aggregate output to ____, and the IS curve to shift to the ____, everything else held
    constant.
    A) rise; left
    B) rise; right
    C) fall; left
    D) fall; right
    Answer: B
    Diff: 2 Type: MC Page Ref: 553
    Skill: Recall
    Objective List: 22.1 Utilize the Keynesian cross model for the determination of aggregate output

    
    


19. 
    

    A decrease in autonomous planned investment spending, other things equal, shifts the
    ____ curve to the ____.
    A) IS; right
    B) IS; left
    C) LM; left
    D) LM; right
    Answer: B
    Diff: 2 Type: MC Page Ref: 553
    Skill: Recall
    Objective List: 22.1 Utilize the Keynesian cross model for the determination of aggregate output

    
    


20. 
    

    An increase in government spending causes the equilibrium level of aggregate output to
    ____ at any given interest rate and shifts the ____ curve to the ____, everything
    else held constant.
    A) rise; LM; right
    B) rise; IS; right
    C) fall; IS; left
    D) fall; LM; left
    Answer: B
    Diff: 2 Type: MC Page Ref: 549
    Skill: Recall
    Objective List: 22.1 Utilize the Keynesian cross model for the determination of aggregate output

    
    


21. 
    

    A reduction in government spending causes the equilibrium level of aggregate output to
    ____ at any given interest rate and shifts the ____ curve to the ____, everything
    else held constant.
    A) rise; LM; right
    B) fall; IS; left
    C) fall; LM; left
    D) rise; IS; right
    Answer: B
    Diff: 2 Type: MC Page Ref: 549
    Skill: Recall
    Objective List: 22.1 Utilize the Keynesian cross model for the determination of aggregate output