A Flat IS Curve Implies That

question 33

Multiple Choice

A flat IS curve implies that

• A)an increase in money supply will change output by a relatively small amount.
• B)a decrease in taxes will change output by a relatively large amount.
• C)changes in money supply will have large multiplier effects on output.
• D)A and B.

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Definitions:

Voucher System

A control mechanism in accounting that uses vouchers to record and authorize transactions prior to their occurrence.

Gross Method

An accounting method for recording purchases at the gross invoice amount before deducting any cash discounts.

Defective Merchandise

Products that are found to have flaws or faults which impair their functionality, appearance, or intended use.