When the Demand for Money Depends Only on Real Income,the

question 104

Multiple Choice

When the demand for money depends only on real income,the resulting ________ LM curve causes fiscal policy to have a ________ effect on income.

• A)vertical,very strong
• B)vertical,zero
• C)horizontal,very strong
• D)horizontal,zero

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Definitions:

Net Advantage to Leasing

This is a calculation used to determine if leasing an asset is a more cost-effective option than purchasing it outright, taking into account all the costs and benefits associated with leasing.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in an even manner.

Depreciation Tax Shield

The tax savings achieved by a company from the deductible expenses of depreciation, reducing its taxable income.

Present Value

The value today of a future sum of money or cash flow sequence, calculated using a defined rate of return.