When the Policy Rate Decreases

question 28

Multiple Choice

When the policy rate decreases,

• 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:

Charles Beard

An influential American historian known for his interpretation of the economic interests that motivated the Founding Fathers in writing the Constitution.

Constitution

The basic rules and recognized examples based on which a state or different entity is administered.

Checks and Balances

A system in which different branches of government have powers that can limit or check the powers of the others, thus ensuring no single branch becomes too powerful.

Two-Thirds Vote

A decision-making process requiring the approval of two-thirds of the members present and voting in a legislative body or other organization.