Exhibit: Policy Interaction Based on the Graph, Starting from Equilibrium

question 8

Multiple Choice

Exhibit: Policy Interaction Based on the graph, starting from equilibrium at interest rate r₃, income Y₂, IS₁, and LM₁, if there is an increase in government spending that shifts the IS curve to IS₂ and the Bank of Canada does not change the money supply, the new equilibrium combination of interest and income will be _____.

• A)r₁, Y₂
• B)r₂, Y₃
• C)r₃, Y₃
• D)r₃, Y₄

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Definitions:

Biomedical Approach

A perspective that attributes psychological disorders to biological phenomena, such as genetic factors, brain chemistry, and neural activity.

Insightful Approach

A method or strategy characterized by the ability to understand complex or hidden aspects of a problem, leading to a novel solution.

Labor Law

The body of laws, administrative rulings, and precedents which address the legal rights of, and restrictions on, working people and their organizations.

Employer Needs

The requirements or demands of employers that need to be met for operational success, including staffing, productivity, and regulatory compliance.