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

question 123

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 result in higher income and:

• A) higher interest rates.
• B) lower interest rates.
• C) no change in interest rates.
• D) either higher, lower, or unchanging interest rates.

---

Definitions:

Tardive Dyskinesia

A neurological disorder characterized by involuntary, repetitive movements, often affecting the face, resulting from long-term use of certain psychiatric drugs.

Antipsychotic

A class of medication primarily used to manage psychosis, including delusions, hallucinations, and disorders such as schizophrenia.

Double-Blind Technique

An experimental procedure in which neither the participants nor the experimenters know who is receiving a particular treatment, used to prevent bias in research results.

Drug Therapies

Treatment plans that involve the use of pharmaceutical drugs to treat or manage diseases, symptoms, or conditions.