If Both Investment and Net Exports Are Totally Insensitive to Changes

question 27

Multiple Choice

If both investment and net exports are totally insensitive to changes in the interest rate, then

• A) the IS curve is horizontal.
• B) the IS curve is vertical.
• C) the LM curve is horizontal.
• D) the LM curve is vertical.
• E) the IS curve is horizontal and the LM curve is vertical; a unique equilibrium pair R*, Y*) is thereby defined unambiguously.

---

Definitions:

Project Variance

The difference between planned and actual performance in a project, indicating the degree of deviation from the project plan.

Activity Duration

the total time required to complete a specific activity or task in the process of project management or planning.

Beta Distribution

A statistical distribution representing probabilities of outcomes across a range of 0 to 1, often used in Bayesian statistics for estimating unknown parameters.

PERT Analysis

A project management tool used to schedule, organize, and coordinate tasks within a project, which stands for Program Evaluation and Review Technique.