If the IS Curve Is Negatively Sloped and the LM

question 72

Multiple Choice

If the IS curve is negatively sloped and the LM curve is positively sloped

• A)an increase in government expenditures will raise real GDP and lower interest rates.
• B)a fall in the real money supply will raise real GDP and lower the interest rate.
• C)an increase in taxes and an increase in money supply will lower the interest rate and give little or no change in real GDP.
• D)an increase in taxes and a fall in the money supply will raise the interest rate and give little or no change in real GDP.

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Definitions:

Total Debt Ratio

A financial metric that compares a company's total debt to its total assets, indicating the degree of leverage and financial risk.

Total Assets

The sum of all resources owned by a company, including cash, investments, property, and other assets, reflected on the balance sheet.

Cash Ratio

A liquidity ratio that measures a company's ability to pay off short-term liabilities with cash and cash equivalents alone, without selling or liquidating other assets.