The LM Curve Slopes Upward Because

question 55

Multiple Choice

The LM curve slopes upward because

• A)as income rises,savings rise,increasing output.
• B)as interest rates rise,the money supply rises,increasing output.
• C)as interest rates rise,planned investment must fall,increasing output.
• D)as income increases,money demand rises,which increases interest rates.
• E)none of the above.

Understand the implications of market efficiency on investment strategies, including the ineffectiveness of technical analysis in efficient markets.

Grasp the role of information dissemination and competition in ensuring market efficiency.

Calculate total returns on investments, incorporating both capital gains/losses and dividend payments.

Recognize the ethical considerations in financial markets, specifically the impact of insider trading on market efficiency.

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Definitions:

Surplus III

Excess of production or supply over demand in a market, leading to potential price reductions to clear the surplus stock.

Total Surplus

The sum of consumer surplus and producer surplus in a market, representing the total net benefit to society from trading a good or service.

Equilibrium Price

Equilibrium price is the market price where the quantity of goods supplied is equal to the quantity of goods demanded.

Willingness to Pay

The maximum amount an individual is prepared to spend on a good or service.