the economics of money, banking, and financial markets

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34. 
    

    An increase in investment spending because companies become more optimistic about
    investment profitability causes the aggregate demand function to shift ____, the equilibrium
    level of aggregate output to rise, and the IS curve to shift to the ____, everything else held
    constant.
    A) up; left
    B) up; right
    C) down; left
    D) down; right
    Answer: B
    Diff: 2 Type: MC Page Ref: 564
    Skill: Recall
    Objective List: 23.1 Apply the IS-MP framework for the determination of aggregate output and
    the interest rate

    
    


35. 
    

    A decrease in investment spending because companies become more pessimistic about
    investment profitability causes the aggregate demand function to shift ____, the equilibrium
    level of aggregate output to fall, and the IS curve to shift to the ____, everything else held
    constant.
    A) up; left
    B) up; right
    C) down; left
    D) down; right
    Answer: C
    Diff: 2 Type: MC Page Ref: 564
    Skill: Recall
    Objective List: 23.1 Apply the IS-MP framework for the determination of aggregate output and
    the interest rate

    
    


36. 
    

    A decrease in investment spending because companies become more pessimistic about
    investment profitability causes the aggregate demand function to shift down, 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: C
    Diff: 2 Type: MC Page Ref: 564
    Skill: Recall
    Objective List: 23.1 Apply the IS-MP framework for the determination of aggregate output and
    the interest rate