the economics of money, banking, and financial markets

731 $

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43. 
    

    Other things equal, a decrease in autonomous consumption shifts the ____ curve to the
    ____.
    A) IS; right
    B) IS; left
    C) MP; left
    D) MP; right
    Answer: B
    Diff: 1 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

    
    


44. 
    

    A decline in autonomous consumer expenditure causes the aggregate demand function to
    shift ____ and the equilibrium level of aggregate output to ____, everything else held
    constant.
    A) up; rise
    B) up; fall
    C) down; rise
    D) down; fall
    Answer: D
    Diff: 1 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

    
    


45. 
    

    The aggregate demand curve is downward sloping because a higher inflation rate leads the
    central bank to raise ____ interest rates, thereby ____ the level of equilibrium
    aggregate output., everything else held constant.
    A) real; lowering
    B) real; raising
    C) nominal; lowering
    D) nominal; raising
    Answer: A
    Diff: 2 Type: MC Page Ref: 563
    Skill: Recall
    Objective List: 23.1 Apply the IS-MP framework for the determination of aggregate output and
    the interest rate