The IS-LM Model Tells Us That Output Remains Constant When

question 103

Multiple Choice

The IS-LM model tells us that output remains constant when a tax cut is combined with ________ in the money supply,with the interest rate ________ its initial level.

• A)an increase,rising above
• B)an increase,falling below
• C)a decrease,rising above
• D)a decrease,falling below

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Definitions:

Pricing Constraints

Limitations that affect how a company can set prices for its products or services, which may include costs, competition, demand, and legal issues.

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a given time period.

Marketplace Conditions

The various factors and conditions that affect the dynamics of buyers and sellers in a particular market, including competition, customer demand, and regulatory environment.

Competitive Markets

Markets where multiple firms are competing against each other to sell their products or services to the same group of consumers.