Assume That the Economy Is in Equilibrium at an Interest

question 32

Multiple Choice

Assume that the economy is in equilibrium at an interest rate and level of national income where the IS curve cuts the LM curve. A large cut in government spending would be expected to:

• A) increase interest rates and the level of national income.
• B) reduce interest rates but increase the level of national income.
• C) reduce interest rates and the level of national income.
• D) shift the IS curve to the right.
• E) leave the economy in an unchanged position because the marginal propensity to consume is constant.

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Definitions:

Relations-oriented Role

A focus or function in teamwork or leadership that prioritizes maintaining positive interpersonal relationships and team dynamics.

Diversity

The inclusion of individuals from a variety of backgrounds, perspectives, and abilities, enriching the social fabric and potentially increasing organizational effectiveness.

Shared Responsibility

The concept that duties and obligations are distributed among members of a group, leading to collective accountability.

Goal-oriented

Being goal-oriented refers to having a focus on setting and achieving specific objectives, driving actions and decisions towards desired outcomes.