If the IS Curve Is Negatively Sloped and the LM

question 72

Multiple Choice

If the IS curve is negatively sloped and the LM curve is positively sloped

• A)an increase in government expenditures will raise real GDP and lower interest rates.
• B)a fall in the real money supply will raise real GDP and lower the interest rate.
• C)an increase in taxes and an increase in money supply will lower the interest rate and give little or no change in real GDP.
• D)an increase in taxes and a fall in the money supply will raise the interest rate and give little or no change in real GDP.

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Definitions:

Trade Surplus

A situation where a country exports more goods and services than it imports, leading to a positive balance of trade.

Tariffs

Taxes imposed on imported goods, often used to protect domestic industries from foreign competition.

Fair Trade

A social movement and market-based approach that aims to help producers in developing countries achieve better trading conditions and promote sustainability.

Free Trade

International trading practices characterized by minimal governmental intervention regarding tariffs, allowing for the unobstructed exchange of goods and services.