the economics of money, banking, and financial markets

892 #

© 2014 Pearson Canada Inc.#

13. 
    

    If the money supply increases, everything else held constant, the ____ curve shifts to
    the ____.
    A) IS; right
    B) IS; left
    C) LM; left
    D) LM; right
    Answer: D
    Diff: 2 Type: MC Page Ref: 5
    Skill: Recall
    Objective List: WEB CHAPTER: The ISLM Model

    
    


14. 
    

    If the money demand decreases, everything else held constant, the ____ curve shifts to
    the ____.
    A) IS; right
    B) IS; left
    C) LM; left
    D) LM; right
    Answer: C
    Diff: 2 Type: MC Page Ref: 5
    Skill: Recall
    Objective List: WEB CHAPTER: The ISLM Model

    
    

28.4 Changes in Equilibrium Level of the Interest Rate and Aggregate Output

1. 
   

   In the ISLM 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: 7
   Skill: Recall
   Objective List: WEB CHAPTER: The ISLM Model

   
   


2. 
   

   An expansionary monetary policy shifts the LM curve to the ____, reducing ____,
   everything else held constant.
   A) left; output and increasing interest rates
   B) left; both real output and interest rates
   C) right; both interest rates and real output
   D) right; interest rates and increasing real output
   Answer: D
   Diff: 2 Type: MC Page Ref: 7 - 8
   Skill: Recall
   Objective List: WEB CHAPTER: The ISLM Model