From an Initial IS-LM Equilibrium with a Normally-Sloped IS Curve

question 120

Multiple Choice

From an initial IS-LM equilibrium with a normally-sloped IS curve and a vertical LM curve,the money supply increases.A the new IS-LM equilibrium we have

• A)higher income and a lower interest rate.
• B)higher income and an unchanged interest rate.
• C)an unchanged income and a lower interest rate.
• D)lower income and an unchanged interest rate.
• E)an unchanged income and a higher interest rate.

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Definitions:

Simple Events

Events in probability that consist of a single outcome and cannot be broken down into simpler components.

Individual Outcome

The result or final state of a single observation or experiment, which can vary between instances in a study or trial.

Constitute

To compose or form something, often used in a legal or formal context to indicate the components that make up a whole.

Probabilities

Measures the likelihood of an event occurring, ranging from 0 to 1.