Based on Our Understanding of the IS-LM Model That Takes

question 55

Multiple Choice

Based on our understanding of the IS-LM model that takes into account dynamics,we know that a reduction in the money supply will cause

• A)an immediate drop in Y and immediate increase in i.
• B)an immediate increase in i and no initial change in Y.
• C)a gradual increase in i and gradual reduction in Y.
• D)none of the above

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Definitions:

RRSP

Registered Retirement Savings Plan, a Canadian investment account for holding savings and investment assets, aimed at providing retirement income.

Contributions

Money, time, or resources given to support a cause, organization, or project.

Monthly Payments

Regular payments made once a month, often in the context of repaying loans or mortgages.

Borrow

The action of receiving something from another party with the intention of returning it or its equivalent at a later date.