Using the IS-LM Analysis, If the LM Curve Is Not

question 31

Multiple Choice

Using the IS-LM analysis, if the LM curve is not horizontal, the multiplier for an increase in government spending is ______ for an increase in government purchases using the Keynesian-cross analysis.

• A) larger than the multiplier
• B) the same as the multiplier
• C) smaller than the multiplier
• D) sometimes larger and sometimes smaller than the multiplier

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