If the Central Bank Follows a Monetary Policy in Which

question 45

Multiple Choice

If the central bank follows a monetary policy in which it maintains a fixed interest rate,then

• A)the LM curve will get steeper.
• B)the IS curve will get steeper.
• C)the LM curve will become vertical.
• D)the LM curve will become horizontal.
• E)none of the above.

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Definitions:

Financial Services

Economic services provided by the finance industry, including banking, insurance, investment management, and securities trading.

Public Assistance

Public assistance refers to government programs that provide financial aid to individuals or families in need, often based on income or other eligibility criteria.

Income Generation

The process through which an individual, company, or economy produces money or goods and services that can lead to income.

Functions of Money

Money serves as a medium of exchange, a unit of account, a store of value, and occasionally, a standard of deferred payment.