If the Short-Run IS-LM Equilibrium Occurs at a Level of Income

question 133

Multiple Choice

If the short-run IS-LM equilibrium occurs at a level of income above the natural level of output, in the long run the ______ will ______ in order to return output to the natural level.

• A) price level; increase
• B) interest rate; decrease
• C) money supply; increase
• D) consumption function; decrease

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Definitions:

Instrumental Goals

Objectives aimed at acquiring the means or resources necessary to achieve more significant end goals.

Long-range Goals

Objectives or aims set to be achieved over an extended period, planning beyond the immediate future.

Short-term Objectives

Goals or targets that are intended to be achieved in the near future.

Nominal Group

A structured form of brainstorming that involves individuals generating ideas independently before sharing them with the group to prioritize or make decisions.