From an Initial IS-LM Equilibrium with Normally-Sloped IS and LM

question 139

Multiple Choice

From an initial IS-LM equilibrium with normally-sloped IS and LM curves,the money supply falls.At the new IS-LM equilibrium we have some combination of a ________ income and a ________ interest rate.

• A)higher,higher
• B)higher,lower
• C)lower,higher
• D)lower,lower

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Definitions:

Marginal Utility

The extra pleasure or benefit a consumer gets from consuming an additional unit of a product or service.

Oysters

Marine mollusks that are enclosed in a hinged shell, often cultivated or harvested for food.

Beers

Alcoholic beverages made from fermenting cereals, primarily barley, and flavored with hops.

Maximizing Utility

The economic principle wherein individuals or firms seek to get the greatest satisfaction or return from their resources and choices, under the constraints they face.