In the IS-LM Model, GDP Becomes More Sensitive to Changes

question 8

Multiple Choice

In the IS-LM model, GDP becomes more sensitive to changes in the supply of money if

• A) investment becomes less sensitive to the interest rate.
• B) the marginal propensity to import increases.
• C) the marginal propensity to import decreases.
• D) net exports become less sensitive to the interest rate.
• E) the marginal propensity to consume decreases.

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