In the Long-Run ISLM Model and with Everything Else Held

question 44

Multiple Choice

In the long-run ISLM model and with everything else held constant,the long-run effect of a contractionary fiscal policy is to ________ real output and ________ the interest rate.

• A)not change;not change
• B)decrease;decrease
• C)decrease;not change
• D)not change;decrease

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Definitions:

Nutrient

Substances that provide nourishment essential for the growth and maintenance of life.

Oxygen-Transport Pigment

A compound, such as hemoglobin in humans, responsible for carrying oxygen through the bloodstream.

Hemoglobin

This substance in red blood cells is in charge of moving oxygen from the lungs to the body's tissues.

Myoglobin

A hemoglobin-like, oxygen-transferring protein found in muscle.