The LM-Curve Becomes Steeper If

question 40

Multiple Choice

The LM-curve becomes steeper if

• A)money demand becomes less sensitive to changes in the interest rate
• B)money demand becomes more sensitive to changes in the interest rate
• C)investment becomes more sensitive to changes in the interest rate
• D)investment becomes less sensitive to changes in the interest rate
• E)money demand becomes less sensitive to changes in income

---

Definitions:

Direct Materials Quantity Variance

A measure used in cost accounting to indicate the variance between the actual quantity of materials used and the standard quantity expected to be used in production.

Standard Material Requirement

The predetermined amount of materials specified for the production of a single unit of product, often used in budgeting and controlling costs.

Standard Cost

A predetermined or budgeted cost of manufacturing a product or performing a service, used as a benchmark to measure performance.

Direct Materials Quantity Variance

The difference between the actual quantity of direct materials used in production and the standard quantity expected, multiplied by the standard cost per unit.