As the LM Curve Becomes Steeper,an Unexpected Increase in Consumer

question 52

Multiple Choice

As the LM curve becomes steeper,an unexpected increase in consumer confidence

• A)will cause a relatively large increase in output and relatively large increase in the interest rate.
• B)will cause a relatively small increase in output and relatively small increase in the interest rate.
• C)is more likely to cause stock prices to rise.
• D)is more likely to cause stock prices to fall.

---

Definitions:

Price Of Factor

The cost associated with a factor of production, such as labor or capital, used in the creation of goods or services.

Output Supply

The total amount of a product or service that is available for purchase at any given price level in a given market.

Long-Run Cost Function

A concept that describes how the total production costs of a firm change based on output levels, considering all inputs as variable in the long term.

Output Supply

The total amount of a good or service that producers are willing and able to sell at a given price over a certain period of time.