the economics of money, banking, and financial markets

907 #

© 2014 Pearson Canada Inc.#

8. 
   

   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

   
   


9. 
   

   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

   
   


10. 
    

    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

    
    


11. 
    

    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