Question

34. An increase in consumer saving for any given level of income will shift the:

A) LM curve upward and to the left.

B) LM curve downward and to the right.

C) IS curve downward and to the left.

D) IS curve upward and to the right.

35. An increase in the money supply shifts the ______ curve to the right, and the aggregate demand curve ______.

A) IS; shifts to the right

B) IS; does not shift

C) LM: shifts to the right

D) LM; does not shift

Answer 1

Q34

ANswer

Option C

IS curve downward and to the left

The increase in saving decreases the consumption and investment spendings which decrease output and interest rate.

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Q35

Answer

Option C

LM; shifts to the right

the increase in the money supply shifts the LM curve to the right which increases output and decreases interest rate and the decrease in interest rate increases consumption and investment so the AD shifts to the right and increases both price level and output.