An Increase in the Price Level Causes

question 51

Multiple Choice

An increase in the price level causes

• A) the LM curve to shift to the right.
• B) the LM curve to shift to the left.
• C) the IS curve to shift to the right.
• D) the IS curve to shift to the left.
• E) no change in an IS-LM representation of an economy.

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Definitions:

Currency Speculation

The act of buying and selling currencies with the aim of profiting from changes in exchange rates.

Market Timing

The strategy of making buy or sell decisions of financial assets by attempting to predict future market price movements, often with the goal of buying low and selling high.

Derivative Positions

Financial contracts whose value is derived from the value of an underlying asset.

Distressed Firms

Companies experiencing financial or operational difficulties, often characterized by liquidity problems, default, or bankruptcy risks.