Suppose We Assume $\bar { a } = 0 , \bar { b } = 1 , R _ { t } = \bar { r } = 5 \%$

question 39

Multiple Choice

Suppose we assume $\bar { a } = 0 , \bar { b } = 1 , R _ { t } = \bar { r } = 5 \%$ , and the real interest rate rises to $R _ { t } ^ { \prime } = 6 \%$ ) In this scenario of the IS curve the economy would, in the short run:

• A) remain at its long-run equilibrium
• B) move from 1 percent below its potential to its long-run equilibrium
• C) move from its long-run equilibrium to 1 percent above its potential
• D) move from its long-run equilibrium to 1 percent below its potential
• E) have increased output

---

Definitions:

Information

Data that is processed, organized, or structured in a way that is meaningful or useful to those who receive or use it, often facilitating decision-making or problem-solving.

Property Issues

Concerns or disputes related to the ownership, use, and rights over physical or intellectual property.

Consequences

The outcomes or results that directly follow from an action or decision, whether they are intended or unintended.

Accountability

The obligation of an individual or organization to account for its activities, accept responsibility for them, and to disclose the results in a transparent manner.