Other Things Equal, a Given Change in Government Spending Has

question 94

Multiple Choice

Other things equal, a given change in government spending has a larger effect on demand the:

• A) flatter the LM curve.
• B) steeper the LM curve.
• C) smaller the interest sensitivity of money demand.
• D) larger the income sensitivity of money demand.

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Definitions:

Trading Securities Portfolio

A collection of stocks, bonds, or other securities that a company holds for the primary purpose of selling them in the short term to profit from price changes.

Year-end Adjustment

Accounting entries made at the end of an accounting period to record revenues and expenses in the correct period, also known as adjusting entries.

Income Statement

Rephrase: A financial statement that shows a company's revenue and expenses over a specific period, highlighting its performance in terms of profit or loss.

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Rate used to determine the amount of cash interest the borrower pays and the investor receives.