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

question 80

Multiple Choice

In the long-run ISLM model and with everything else held constant,the long-run effect of an expansionary fiscal policy is to ________ real output and ________ the interest rate.

• A)increase;increase
• B)not change;not change
• C)increase;not change
• D)not change;increase

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Definitions:

Investment Center Assets

Resources and assets managed within a business segment or division that is responsible for its own revenues, expenses, and investments, allowing for performance measurement.

Service Department Expenses

Costs incurred by the departments that support the production or operation departments but do not directly contribute to the production of goods.

Departmental Income Statements

Financial statements that report the revenues, costs, and income for individual departments within a company.

Investment Center Managers

Personnel responsible for overseeing an investment center, which is a division or unit within an organization judged on its profitability and return on investment.