The LM Curve Slopes Upward to the Right Because

question 20

Multiple Choice

The LM curve slopes upward to the right because

• A)the demand for money plus the demand for nonmoney assets must equal the supply of money plus the supply of nonmoney assets.
• B)a higher real interest rate is associated with a higher level of the output gap in money market equilibrium.
• C)a higher real interest rate is associated with a higher level of saving in goods market equilibrium.
• D)in equilibrium the actual real interest rate must increase one-for-one with expected real interest rate.

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Definitions:

Cost Of Goods Sold

Expenses directly related to the creation of products a company sells, encompassing both material and labor costs.

Special Journals

Accounting journals designed for recording a particular type of transaction in a more efficient manner.

Cash Payments Journal

A specialized accounting journal used to record all cash outlays of a business, including expenses, asset purchases, and debt payments.

Purchases Journal

A record of all purchase transactions for inventory, usually on credit, maintained by a business.