In the ISLM Framework,an Expansionary Fiscal Policy Causes Aggregate Output

question 59

Multiple Choice

In the ISLM framework,an expansionary fiscal policy causes aggregate output to ________ and the interest rate to ________,everything else held constant.

• A)increase;increase
• B)increase;decrease
• C)decrease;decrease
• D)decrease;increase

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Definitions:

Deposit Only

A deposit only account is a type of bank account where funds can be deposited but not directly withdrawn by the account holder, typically used for specific purposes like settling transactions.

Indorsed in Blank

Pertains to a signature on a financial instrument, such as a check, without specifying a payee, allowing any holder to cash or transfer it.

Negotiation

The process by which two or more parties attempt to settle their differences or reach an agreement through discussion and compromise.

Accidental

An unexpected and unintentional event that causes damage or injury.