Assume That the Current Demand for Goods DOES Depend on Expectations

question 12

Multiple Choice

Assume that the current demand for goods DOES depend on expectations in the IS-LM model.A monetary expansion in the current period will cause a rightward shift in the IS curve if

• A)current and expected future real interest rates are positively related.
• B)current and expected future real interest rates are negatively related.
• C)current and expected future real interest rates are unrelated.
• D)the central bank is expected to reverse any current movements in monetary policy in the future.
• E) monetary policy cannot affect, directly or indirectly, the position of the IS curve in the current period.

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Definitions:

Real Property

Real estate comprising the ground and any structures or natural features permanently affixed, such as homes and foliage.

Properly Executed Deed

A legal document that has been completed correctly, meeting all necessary formalities to transfer ownership of property.

Oral Declaration

A statement or announcement made verbally and not in written form, which can be legally binding under certain conditions.

Real Property Title

Legal ownership and right to the use of land and the permanent structures attached to it.