The Effect of a Drop in Business Confidence on the Evaluation

question 19

Multiple Choice

The effect of a drop in business confidence on the evaluation of MPK shifts the IS curve to the ________.Suppose the LM curve is fixed.The resulting ________ in the interest rate works through the accelerator model to ________ the fall in equilibrium output.

• A)left,rise,increase
• B)left,rise,more than offset
• C)left,fall,offset part of
• D)right,rise,offset part of
• E)right,fall,more than offset

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