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In the IS-LM Model When M/P Rises, in Short-Run Equilibrium

question 52

Multiple Choice

In the IS-LM model when M/P rises, in short-run equilibrium, in the usual case the interest rate ______ and output ______.

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Definitions:

Cumulative

Pertaining to an aggregate or total amount added up over time, often used in context with dividends that are accumulated if not paid out.

Noncumulative

A term often used in dividends policy, indicating that if a dividend is not paid out, it doesn't accumulate for future payment.

U.S. GAAP

United States Generally Accepted Accounting Principles, which constitute the framework of guidelines for financial accounting used in the US.

Interest Expense

The charge for borrowing money typically calculated as a rate of the principal amount annually.

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