A Decline in the Money Supply Shifts the LM Curve

question 45

Multiple Choice

A decline in the money supply shifts the LM curve to the left,causing the interest rate to ________ and output to ________,everything else held constant.

• A)rise;rise
• B)rise;fall
• C)fall;rise
• D)fall;fall

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Definitions:

Adjusting Entry

A journal entry made in accounting records at the end of an accounting period to allocate income and expenditure to the appropriate periods.

Adjusting Entries

At the conclusion of an accounting cycle, entries are documented in the accounting ledger to distribute revenues and costs to the actual period they happened.

Types

Varieties or classifications into which objects, people, or concepts can be grouped based on shared characteristics.

Profit Margin Ratio

A financial metric used to evaluate a business's profitability by dividing net income by net sales.