If the LM Curve Is Vertical,then

question 52

Multiple Choice

If the LM curve is vertical,then

• A)there is partial "crowding out" of an increase in government expenditures.
• B)the increase in the money supply will have no impact on the level of real GNP.
• C)the demand for money is highly sensitive to the interest rate.
• D)the velocity of money is constant.

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Definitions:

Price Elastic

A measure of how the quantity demanded of a product or service changes in response to a change in its price.

Sales Volume

The total quantity of goods or services sold within a specific period, often used as an indicator of business performance.

Price Inelastic

A characteristic of goods or services whose demand does not significantly change with changes in price, indicating that consumers are relatively unresponsive to price adjustments.

Price Elastic

Describes a condition where the demand for a product or service changes significantly in response to a change in its price.