Use the Following to Answer Questions

question 138

Multiple Choice

Use the following to answer questions :
Exhibit: IS-LM to Aggregate Demand
-(Exhibit: IS-LM to Aggregate Demand) Based on the graph, if LM₃ shifts to LM₂ because the money supply decreases from M₃ to M₂ then, holding other factors constant:

• A) the aggregate demand curve will shift to the right.
• B) the aggregate demand curve will shift to the left.
• C) this represents a movement up the aggregate demand curve.
• D) this represents a movement down the aggregate demand curve.

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Definitions:

Operating Cash Flow

The amount of cash generated by a company’s normal business operations.

Depreciation Expense

Allocating the investment in a tangible asset over the time it is functional.

Net Working Capital

An indicator of a firm's immediate financial wellness and liquid assets, determined by subtracting current liabilities from current assets.

Net Working Capital

The financial metric indicating the liquidity position of a firm by subtracting its current liabilities from its current assets.