Which of the Following Will Cause the LM Curve to Shift

question 25

Multiple Choice

Which of the following will cause the LM curve to shift down?

• A)a reduction in the expected future interest rate
• B)a reduction in current income
• C)a reduction in expected future taxes
• D)all of the above
• E) none of the above

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Definitions:

Unit Product Cost

represents the total cost to produce one unit of product, including direct materials, direct labor, and overhead.

Fixed Manufacturing Overhead

encompasses the consistent, non-varying costs of producing goods, such as factory lease or salary of supervisors, linked but differently phrased to fixed manufacturing expenses.

Outside Supplier

An external entity that provides goods or services to a company, which are not produced in-house.

Variable Costs

Costs that vary directly with the level of production or service output, such as raw materials and direct labor expenses.