If the Level of Government Transfer Payments Increases While Everything

question 26

Multiple Choice

If the level of government transfer payments increases while everything else stays the same, then

• A)the IS-curve will shift to the left
• B)the IS-curve will shift to the right
• C)the IS-curve will become flatter and shift to the right
• D)the LM-curve will shift to the right
• E)the LM-curve will become flatter and shift to the right

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Definitions:

Formal Instrument

A legal document expressing an agreement, obligation, or right enforceable by law.

Note Receivable

A financial asset representing a written promise for the repayment of a specific amount of money, plus interest, by a debtor to the lender at a future date.

Accounts Receivable Subsidiary Ledger

An Accounts Receivable Subsidiary Ledger is a detailed ledger that contains individual accounts for all debtors, tracking their sales on credit and payments.

General Ledger

The general ledger is the primary accounting record of a company that uses double-entry bookkeeping, summarizing all transactions into accounts for financial statements.