The Effects of Financial Deregulation on the IS and LM

question 132

Multiple Choice

The effects of financial deregulation on the IS and LM curves ________ the volatility of interest rates as the curves shift,such as the change in the amount that the interest rate must ________ when the Fed conducts open market purchases.

• A)decrease,rise
• B)decrease,fall
• C)increase,rise
• D)increase,fall

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Definitions:

Fixed Budgets

Financial plans that allocate a predetermined amount of resources for a specific period, not allowing for modifications based on actual income or expenses.

Policies and Procedures

Established guidelines and methods of operation that an organization sets to regulate its activities and achieve objectives efficiently and in compliance with legal standards.

Single-use Plans

Specific actions or strategies designed to address a particular problem, goal, or project, and not intended for repeated or continual use.

Budgets

Financial plans that allocate resources, project revenues and expenses, and guide spending and investment decisions over a specific period.