Which of the Following Statements Concerning IS - MP Analysis

question 6

Multiple Choice

Which of the following statements concerning IS - MP analysis is true?

• A) For a given change in taxes, the IS curve will shift less than for an equal change in government spending.
• B) Changes in net exports arising from a change in interest rates causes a shift in the IS curve.
• C) A fall in the money supply shifts the LM curve to the right.
• D) Expansionary fiscal policy will cause the interest rate to fall.

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Definitions:

Parasympathetic Nervous System

A division of the autonomic nervous system that conserves energy by slowing the heart rate and increasing intestinal and gland activity, facilitating a state of rest and digest.

General Adaptation Syndrome

A three-stage response (alarm, resistance, exhaustion) that describes the body's short-term and long-term reactions to stress.

Distress

Negative stress, the kind felt during an illness or when going through a divorce.

Major Life Changes

Significant events or transitions in a person's life that require adaptation, such as marriage, divorce, moving to a new location, or significant loss.