The LM Curve Will Shift to the Right If

question 44

Multiple Choice

The LM curve will shift to the right if:

• A)the average price level decreases.
• B)the money supply decreases.
• C)the money demand increases.
• D)the interest rate decreases.

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Definitions:

Zero Economic Profits

Zero economic profits occur in a competitive equilibrium when firms earn just enough revenue to cover their total costs, including the opportunity costs.

Short Run

A period of time during which at least one of a firm's inputs is fixed, limiting its ability to increase production.

Long Run

A period in economics in which all factors of production and costs are variable, allowing for full adjustment to changes.

Total Revenue

Total revenue is the total income generated by a company from its sales of goods or services before any expenses are subtracted.