In the IS-LM Model, Policy Is Said to Be Ineffective

question 31

Multiple Choice

In the IS-LM model, policy is said to be ineffective in the long run because it cannot change

• A) the price level.
• B) output.
• C) the interest rate.
• D) all of the above.

---

Definitions:

P(A ∪ B)

Represents the probability of the occurrence of at least one of two events A or B.

Mutually Exclusive

Two events that cannot occur at the same time, meaning the occurrence of one event precludes the other.

Probability

Probability is a measure of the likelihood that an event will occur, quantified as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.

Independent Events

Two or more events in probability theory where the occurrence of one event does not influence the occurrence of another.