If the Economy Is Characterized by a Stable IS Curve

question 17

Multiple Choice

If the economy is characterized by a stable IS curve and an unstable LM curve,then ________ target produces ________ fluctuations in aggregate output.

• A)an interest rate;larger
• B)a money supply;smaller
• C)a money supply;larger
• D)an exchange rate;smaller

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Definitions:

Problem Solving

The process of identifying a challenge or difficulty and finding an effective solution for it.

Human Decision Making

The process by which individuals make choices or come to conclusions based on factors such as personal preference, reasoning, and external influences.

Weak Disposition

A tendency or inclination to behave in a certain way that is perceived as lacking in strength, confidence, or decisiveness.

Critical Thinking

Thoroughly exploring and critiquing a problem in order to reach a determination.