In the IS-LM Model Under the Usual Conditions in a Closed

question 51

Multiple Choice

In the IS-LM model under the usual conditions in a closed economy, an increase in government spending increases the interest rate and crowds out:

• A) prices.
• B) investment.
• C) the money supply.
• D) taxes.

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Definitions:

U.S. Troops

Military personnel and soldiers of the United States, often engaged in national defense and international peacekeeping missions.

Foreign Capital

Investment of money from countries outside the recipient country, typically involved in international trade, investment, and financial markets, which can influence economic development.

Mexican War

Controversial war with Mexico for control of California and New Mexico, 1846–1848; the Treaty of Guadalupe Hidalgo fixed the border at the Rio Grande and extended the United States to the Pacific coast, annexing more than a half-million square miles of Mexican territory.

Fifty-four Forty

A historical slogan from the U.S. presidential election of 1844, expressing the goal of expanding U.S. territorial claims in the Oregon Territory up to latitude 54°40′ north.