In the Long Run, a Rightward Shift of the FE

question 26

Multiple Choice

In the long run, a rightward shift of the FE line will result in

• A)the LM curve shifting down and to the right.
• B)the IS curve shifting up and to the left.
• C)an increase in the real interest rate.
• D)an increase in the price level.

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Definitions:

Emergency Fund

A reserve of money set aside to cover unexpected expenses or financial emergencies.

Lump Sum

A single payment made at a particular time, as opposed to a series of smaller payments or installments.

Annual Payments

Annual payments are payments made once a year for various financial commitments such as loans, insurance policies, or rent, providing a means to manage large payment obligations over time.

Interest Rate

The expense a borrower is obliged to pay to a lender, formulated as a percentage of the principal, for the service of borrowing assets.