Figure 4 ​ ​

question 12

Multiple Choice

Figure 4 ​ ​
Refer to figure 4 above. Figure 4 shows the IS-LM model. Which of the following statements about the figure is NOT true?

• A) The figure shows the economy would be in general equilibrium when the interest rate is i₁ and the level of national income is Y₁.
• B) The figure shows that an expansionary monetary policy will lead to an increase in national income and an increase in interest rates.
• C) The figure shows that an expansionary fiscal policy will lead to an increase in national income and an increase in interest rates.
• D) The figure shows the effect of an increase in autonomous expenditure.

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Definitions:

Optimal Arousal

A theory suggesting there is a level of arousal that is ideal for facilitating optimal performance on a task or activity.

Incentives

Rewards or stimuli that motivate individuals to perform actions or behaviors, often used to encourage desired outcomes.

Self-actualized

Being self-actualized refers to realizing and fulfilling one's potential and capabilities, as described in Maslow's hierarchy of needs.

Achievement

The act of accomplishing a task or reaching a goal, often requiring skill, effort, or courage.