the economics of money, banking, and financial markets

720 $

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8. 
   

   An increase in autonomous investment spending causes the IS curve to shift ____ and the
   aggregate demand curve to shift ____.
   A) left; left
   B) left; right
   C) right; left
   D) right; right
   Answer: A
   Diff: 2 Type: MC Page Ref: 564
   Skill: Applied
   Objective List: 23.1 Apply the IS-MP framework for the determination of aggregate output and
   the interest rate

   
   


9. 
   

   An increase in government purchases causes the IS curve to shift ____ and the aggregate
   demand curve to shift ____.
   A) left; left
   B) left; right
   C) right; left
   D) right; right
   Answer: A
   Diff: 2 Type: MC Page Ref: 564
   Skill: Applied
   Objective List: 23.1 Apply the IS-MP framework for the determination of aggregate output and
   the interest rate

   
   


10. 
    

    A decrease in taxes causes the IS curve to shift ____ and the aggregate demand curve to
    shift ____.
    A) left; left
    B) left; right
    C) right; left
    D) right; right
    Answer: A
    Diff: 2 Type: MC Page Ref: 564
    Skill: Applied
    Objective List: 23.1 Apply the IS-MP framework for the determination of aggregate output and
    the interest rate

    
    


11. 
    

    In the IS and MP framework, an expansionary monetary policy causes aggregate output to
    ____ and the interest rate to ____, everything else held constant.
    A) increase; increase
    B) increase; decrease
    C) decrease; decrease
    D) decrease; increase
    Answer: B
    Diff: 2 Type: MC Page Ref: 563 - 564
    Skill: Recall
    Objective List: 23.5 Illustrate how the ISLM model generates the aggregate demand curve
    featured in the aggregate demand and supply framework