In the IS-LM Model, the Interest Rate Serves as a Link

question 35

Multiple Choice

In the IS-LM model, the interest rate serves as a link between

• A)household saving and business investment
• B)government spending and consumer spending
• C)actions of the central bank and changes in consumer spending
• D)the goods market and the assets market
• E)domestic markets and foreign markets

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Definitions:

Negotiated Price Approach

An approach to transfer pricing that allows managers of decentralized units to agree (negotiate) among themselves as to the transfer price.

Transfer Price

The price at which goods and services are sold between divisions within the same company.

Responsibility Centers

Units or departments within an organization, each accountable for its own activities and financial results.

Investment Center

An investment center is a business unit within an organization that has control over its revenues, expenses, and investments, and is evaluated based on its return on investment.