Suppose There Is a Simultaneous Reduction in the Expected Future

question 16

Multiple Choice

Suppose there is a simultaneous reduction in the expected future interest rate and increase in future expected output.This will cause which of the following to occur?

• A)the IS curve to shift left in the current period
• B)the IS curve to shift right in the current period
• C)the LM curve to shift up in the current period
• D)the LM curve to shift down in the current period
• E) an ambiguous effect on the position of the IS curve in the current period

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Definitions:

Secondary Sector

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Tertiary Sector

The segment of the economy that provides services rather than producing goods, including sectors like retail, education, and health care.

Economist

A professional in the social science discipline of economics, concerned with the analysis of goods and services distribution, consumption, and production.

Shoshana Zuboff

A scholar and author who specializes in the study of the digital economy, especially in regard to the social and economic impacts of technology.