Consider an Initial IS-LM Equilibrium Point Which Corresponds to a Point

question 18

Multiple Choice

Consider an initial IS-LM equilibrium point which corresponds to a point labeled "A" on the current AD curve.
-Refer to the information above.If the nominal money supply falls by 4 percent,accompanied by a 4 percent fall in the price level,the resulting IS-LM equilibrium corresponds to a point in the AD diagram

• A)which is exactly point A again.
• B)4 percent straight above A on a new AD curve.
• C)4 percent straight below A on a new AD curve.
• D)directly to the right of A on a new AD curve.
• E)directly to the left of A on a new AD curve.

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Definitions:

Preceding Year

The year immediately before the current year.

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a period, calculated as cost of goods sold divided by the average inventory.

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects revenue from its credit sales, calculated by dividing net credit sales by the average accounts receivable.

Sales In Receivables

Likely refers to the concept of "Accounts Receivables" which are amounts owed by customers for goods or services delivered on credit.