If Real Money Balances Enter the IS-LM Model Both Through

question 79

Multiple Choice

If real money balances enter the IS-LM model both through the theory of liquidity preference and the Pigou effect, then a fall in the price level will shift:

• A) only the LM curve.
• B) only the IS curve.
• C) both the LM and the IS curves.
• D) neither the LM nor the IS curve.

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