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

question 24

Multiple Choice

In the long-run ISLM model and with everything else held constant,the long-run effect of an autonomous fall in consumption expenditure is to ________ real output and ________ the interest rate.

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

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Definitions:

Conditioned Stimulus

A previously neutral stimulus that, after being associated with an unconditioned stimulus, elicits a conditioned response in classical conditioning.

Unconditioned Response

An automatic, natural reaction to a stimulus that occurs without prior conditioning or learning.

Conditioned Response

A conditioned response is a learned reaction to a previously neutral stimulus that has become associated with an unconditioned stimulus through conditioning.

Unconditioned Stimulus

In classical conditioning, it is a stimulus that naturally and automatically triggers a response without prior learning.