Refer to the Following Figure When Answering

question 37

Multiple Choice

Refer to the following figure when answering
Figure 11.5: IS Curve
-Consider Figure 11.5. If the economy initially is at its long-run equilibrium and the real interest rate decreases, the economy:

• A) moves from point b to point a
• B) moves from point d to point a
• C) moves from point d to point c
• D) moves from point c to point d
• E) moves from point d to point b

---

Definitions:

Tax Advantage

A tax advantage refers to the economic bonus that applies to certain accounts or investments that are exempt from taxation, or taxed at a lower rate.

Rising Prices

A situation where the general level of prices for goods and services increases over a period, indicative of inflation.

LIFO Liquidation

The process of reducing inventory using the Last-In, First-Out (LIFO) method, which can impact the cost of goods sold and taxes during times of inflation.

SEC

The Securities and Exchange Commission is an agency of the U.S. government tasked with enforcing federal laws pertaining to securities and overseeing the securities industry, including stock and options exchanges.