Suppose You Were Given an Equilibrium Interest Rate and a Price

question 48

Multiple Choice

Suppose you were given an equilibrium interest rate and a price level consistent with the equality of supply and demand in both the money market and the aggregate goods and services market. You could then

• A) compute the corresponding level of GDP only by plugging the given interest rate into the LM curve and solving for Y*.
• B) compute the corresponding level of GDP only by plugging the given interest rate into the IS curve and solving for Y*.
• C) compute the corresponding level of GDP by plugging the given interest rate into either the IS curve or the LM curve and solving for Y*.
• D) not necessarily compute the corresponding level of GDP from either the IS or the LM curve.
• E) none of the above.

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