Assume That the Current Demand for Goods DOES Depend on Expectations

question 12

Multiple Choice

Assume that the current demand for goods DOES depend on expectations in the IS-LM model.A monetary expansion in the current period will cause a rightward shift in the IS curve if

• A)current and expected future real interest rates are positively related.
• B)current and expected future real interest rates are negatively related.
• C)current and expected future real interest rates are unrelated.
• D)the central bank is expected to reverse any current movements in monetary policy in the future.
• E) monetary policy cannot affect, directly or indirectly, the position of the IS curve in the current period.

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Definitions:

Sexually Transmitted Disease (STI)

A sexually transmitted disease (STI), also known as a sexually transmitted infection, is an infection transmitted through sexual contact, caused by bacteria, viruses, or parasites.

Self-Examination Techniques

Methods individuals can use to examine their own bodies to detect any signs of potential health problems early.

Exposure

Coming into contact with or being subjected to something (e.g., chemicals, diseases) which may have a harmful effect.

Operant Conditioning

A method of learning that occurs through rewards and punishments for behavior, through which an association is made between a behavior and a consequence.