In the IS-LM Model,an Increase in Expected Inflation Will Cause

question 22

Multiple Choice

In the IS-LM model,an increase in expected inflation will cause which of the following?

• A)an increase in output
• B)an increase in the nominal interest rate
• C)a reduction in the real interest rate
• D)all of the above
• E)none of the above

---

Definitions:

Levels-Of-Processing Principle

A theory in cognitive psychology suggesting that the depth (shallow to deep) of mental processing affects memory recall, with deeper levels of processing leading to longer-lasting memory retention.

Retroactive Interference

The process by which new information impairs the retrieval of previously learned information.

Proactive Interference

A memory error that occurs when older information interferes with the recall of newer information.

Levels-Of-Processing Principle

A theory suggesting the depth of mental processing affects memory recall, with deeper levels of analysis producing more durable memory traces.