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In the Long-Run ISLM Model and with Everything Else Held

question 95

Multiple Choice

In the long-run ISLM model and with everything else held constant,as long as the level of output ________ the natural rate level,the price level will continue to ________,shifting the LM curve to the ________,until finally output is back at the natural rate level.


Definitions:

Effective Annual Rate

The interest rate on an investment or loan which accounts for the effect of compounding over a given period.

Semi-annually Return

The rate of return on an investment calculated by compounding interest twice a year.

Investment

The action or process of allocating resources, usually money, with the expectation of generating an income or profit.

Effective Annual Rate

The interest rate that is adjusted for compounding over a given period, representing the actual annual return on an investment.

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