The LM-Curve

question 5

Multiple Choice

The LM-curve

• A)shows the relationship between the interest rate and the level of investment spending
• B)is negatively sloped because increases in the income level can only be achieved if the interest rate is lowered
• C)is negatively sloped since increases in money supply always lower interest rates
• D)is upward sloping because a higher income level is always associated with a higher nominal money supply
• E)shows combinations of the interest rate and the income level such that money supply and money demand are equal

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Definitions:

Cyclothymic

Relating to or characterized by cyclothymia, a mood disorder with alternating periods of mild depression and hypomania.

Circle

A simple closed shape consisting of all points in a plane that are at a given distance from a given center point.

Cognitive-behavioral Therapy

A short-term, goal-oriented psychotherapy that takes a hands-on, practical approach to problem-solving by modifying dysfunctional emotions, behaviors, and thoughts.

Psychoanalysis

A therapeutic technique and theory of psychology developed by Sigmund Freud, focusing on unconscious processes.