907 #
© 2014 Pearson Canada Inc.#
In the long-run ISLM model and with everything else held constant, the long-run effect of an
autonomous increase in investment is to ____ real output and ____ the interest rate.
A) increase; increase
B) increase; not change
C) not change; increase
D) not change; decrease
Answer: C
Diff: 2 Type: MC Page Ref: 17
Skill: Recall
Objective List: WEB CHAPTER: The ISLM Model
In the long-run ISLM model and with everything else held constant, the long-run effect of a
fall in net exports is to ____ real output and ____ the interest rate.
A) increase; increase
B) increase; not change
C) not change; increase
D) not change; decrease
Answer: D
Diff: 2 Type: MC Page Ref: 17
Skill: Recall
Objective List: WEB CHAPTER: The ISLM Model
In the long-run ISLM model and with everything else held constant, the long-run effect of an
autonomous fall in consumption expenditure is to ____ real output and ____ the
interest rate.
A) increase; increase
B) increase; not change
C) not change; increase
D) not change; decrease
Answer: D
Diff: 2 Type: MC Page Ref: 17
Skill: Recall
Objective List: WEB CHAPTER: The ISLM Model
In the long-run the ISLM model predicts that ____ can change real output.
A) only monetary policy
B) only fiscal policy
C) both monetary and fiscal policy
D) neither monetary nor fiscal policy
Answer: D
Diff: 2 Type: MC Page Ref: 17
Skill: Recall
Objective List: WEB CHAPTER: The ISLM Model