Suppose the Intersection of the IS and LM Curves Is

question 25

Multiple Choice

Suppose the intersection of the IS and LM curves is to the right of the FE line.An increase in the price level would most likely eliminate a disequilibrium among the asset,labor,and goods markets by

• A)shifting the LM curve up and to the left.
• B)shifting the IS curve up and to the right.
• C)shifting the IS curve down and to the left.
• D)shifting the FE curve to the left.

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Definitions:

Official Unemployment Rate

The percentage of the labor force that is jobless and actively seeking employment, measured by government agencies to assess the economy's health.

Discouraged Workers

Individuals who are not actively looking for work because they believe no jobs are available for them or there are none for which they would qualify.

Marginally Attached

A term used to describe individuals who are not currently in the labor force but have looked for work in the recent past and are willing to work.

Economic History

The study of how economic phenomena evolved in the past.