700 #
© 2014 Pearson Canada Inc.#
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
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
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
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