In the IS-LM Model the Equilibrium Level of the Interest

question 2

Multiple Choice

In the IS-LM model the equilibrium level of the interest rate depends on:

• A)money supply.
• B)government spending.
• C)the marginal propensity to consume.
• D)all of the above.

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Definitions:

Net Income

The total profit or loss of a company after all revenues, expenses, taxes, and costs have been subtracted.

Financing Activities

These are transactions involving the flow of cash between a company and its owners and creditors. It includes issuing debt, repaying debt, stock sales, and stock repurchases.

Operating Activities

Activities that relate directly to the primary business operations of an organization, such as sales, provision of services, manufacturing of goods, etc.

Depreciation Expense

The allocation of an asset's cost over its useful life, representing the wear and tear, deterioration, or obsolescence of the asset.