When a Financial Friction Is Added to the Short-Run Model

question 104

Multiple Choice

When a financial friction is added to the short-run model it:

• A) shifts the MP curve up.
• B) shifts the IS curve down.
• C) shifts the AS curve down.
• D) is represented by a movement along the MP curve.
• E) is represented by a movement along the IS curve.

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Definitions:

Intimate

Characterized by a close, familiar, and usually affectionate or loving personal relationship.

Turbulent

Characterized by disorder, confusion, or agitation; often used to describe situations, relationships, or environments that are chaotic or unstable.

Self-disclosures

The act of revealing personal, private, or sensitive information about oneself to others.

Proximity

Physical nearness to another that promotes communication and thus attraction.