When the Policy Rate Increases

question 7

Multiple Choice

When the policy rate increases,

• A)IS curve does not change.
• B)IS curve shifts to the right.
• C)IS curve shifts to the left.
• D)LM curve shifts upward.
• E) LM curve shifts downward.

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Definitions:

Self-contradictory

A statement or position that contradicts itself, making it logically impossible or nonsensical.

Inconsistent Statement

An assertion that does not align or match with previous statements or facts, leading to a contradiction.

Truth Table

A table in logic that is utilized to assess if a complex statement is true or false by examining the truth values of its constituent parts.

Negation

The logical operation of denying or contradicting a statement or proposition, creating its opposite in meaning.