9.19 Identify: (a) One shift parameter for the IS curve that is also a shift parameter...
9.19 Identify:
(a) One shift parameter for the IS curve that is also a shift
parameter for the AD curve.
(b) One shift parameter for the LM curve that is also a shift
parameter for the AD curve.
(c) One shift parameter for the LM curve that is NOT a shift
parameter for the AD curve.
(d) One shift parameter for the FE curve.
Homework Answers
a) An increase in the government expenditure will shift the IS and the aggregate demand curve both.
b) An increase or decrease in the money supply will shift both the LM curve and Aggregate demand curve.
c) Increase or decrease in the money demand will shift the LM curve but not the AD curve.
d) A temporary adverse supply shock like an increase in the oil price will shift the FE curve.
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9.19 Identify:
(a) One shift parameter for the IS curve that is also a shift
parameter...
17. An more people use credit card for daily transaction, money demand declines. This will shift...
17. An more people use credit card for daily transaction, money demand declines. This will shift the: a. IS curve to the right. b. LM curve to the right. c. FE curve to the right. d. LM curve to the left.
Suppose that MD is insensitive to the interest rate. What does the LM curve look like...
Suppose that MD is insensitive to the interest rate. What does the LM curve look like (graphically)? What is the effect on output and interest rates from a shift in the IS curve? Suppose that MD is very sensitive to the interest rate. What does the LM curve look like (graphically)? What is the effect of a shift in the IS curve on output and interest rates? Suppose that AD is very sensitive to the interest rate. Draw the IS...
If the price level decreases, then aggregate demand increase along the AD curve but the curve doesn’t shift. a. True b....
If the price level decreases, then aggregate demand increase along the AD curve but the curve doesn’t shift. a. True b. False The Long-run Aggregate Supply Curve (LRAS) can shift to the right because of: a. Discovery of more natural resources b. Development of more efficient technology c. Inviting more labor force through Immigration d. All of the above Which of the following may happen due to a crash in the stock market: a. AD curve may shift to the...
factors that shift the AD Curve include A) government purchases B) autonomous investment C) taxes D)...
factors that shift the AD Curve include A) government purchases B) autonomous investment C) taxes D) all of the above E) none of the above 33. If government cuts taxes A) after tax income should increase shifting AD to the left to a lower cu B) after tax income should increase shifting AD to the right to a higher eq output C) after tax income and the equilibrium level of output remain unchanged D) after tax income remains unchanged but...
34. An increase in consumer saving for any given level of income will shift the: A)...
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:...
An earlier chapter discussed the variables that shift the demand curve and the variables that shift...
An earlier chapter discussed the variables that shift the demand curve and the variables that shift the supply curve. How many of these variables that shift microeconomic demand and supply curves also shift the aggregate demand (AD) curve or the short-run aggregate supply (SRAS) curve? What might you conclude about the relationship between the concepts of demand and supply in microeconomics and in macroeconomics?
Assume the LM curve is flat. An increase in the risk premium A. the IS-curve will...
Assume the LM curve is flat. An increase in the risk premium A. the IS-curve will shift to the right and an increase in equilibrium output. B. the LM-curve will shift to the up and an increase in equilibrium interest rate. C. the LM-curve and IS-curve remain same, so no impact on equilibrium output and interest rate D. the LM-curve will shift to the down and an increase in equilibrium output. E. the IS-curve will shift to the left and...
During a recession consumption falls, causing the aggregate demand curve to shift to the ________. In...
During a recession consumption falls, causing the aggregate demand curve to shift to the ________. In response, the government can increase government spending to shift the ________. a. left; aggregate demand (AD) curve to the right b. left; short-run aggregate supply (SRAS) curve to the right c. right; aggregate demand (AD) curve to the left d. right; short-run aggregate supply (SRAS) curve to the right e. left; long-run aggregate supply (LRAS) curve to the right
12) In the IS-LM Model, assuming a downward sloping IS curve and an upward sloping LM...
12) In the IS-LM Model, assuming a downward sloping IS curve and an upward sloping LM curve; an increase in consumer wealth is going to A) cause a rightward shift of the IS curve. B) cause a rightward shift of the LM curve. C) cause a movement along the IS curve D) cause a leftward shift of the LM curve.
Identify changes in two variables that would shift the supply curve of dollars to the right....
Identify changes in two variables that would shift the supply curve of dollars to the right. Identify changes in two variables that would shift the demand curve for dollars to the right.
Suppose that MD is insensitive to the interest rate. What does the LM curve look like (graphically)? What is the effect on output and interest rates from a shift in the IS curve? Suppose that MD is very sensitive to the interest rate. What does the LM curve look like (graphically)? What is the effect of a shift in the IS curve on output and interest rates? Suppose that AD is very sensitive to the interest rate. Draw the IS...
factors that shift the AD Curve include A) government purchases B) autonomous investment C) taxes D) all of the above E) none of the above 33. If government cuts taxes A) after tax income should increase shifting AD to the left to a lower cu B) after tax income should increase shifting AD to the right to a higher eq output C) after tax income and the equilibrium level of output remain unchanged D) after tax income remains unchanged but...
12) In the IS-LM Model, assuming a downward sloping IS curve and an upward sloping LM curve; an increase in consumer wealth is going to A) cause a rightward shift of the IS curve. B) cause a rightward shift of the LM curve. C) cause a movement along the IS curve D) cause a leftward shift of the LM curve.
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