Consider an Initial IS-LM Equilibrium with Normally-Sloped Curves

question 46

Multiple Choice

Consider an initial IS-LM equilibrium with normally-sloped curves.An increase in government spending takes us to a new equilibrium with ________ income and ________ interest rate.

• A)higher,a higher
• B)higher,a lower
• C)an unchanged,a higher
• D)an unchanged,a lower
• E)lower,an unchanged