During the Financial Crisis of 2008-2009, Many Financial Institutions Stopped

question 49

Multiple Choice

During the financial crisis of 2008-2009, many financial institutions stopped making loans even to creditworthy customers, which could be represented in the IS-LM model as a(n) :

• A) expansionary shift in the IS curve.
• B) contractionary shift in the IS curve.
• C) expansionary shift in the LM curve.
• D) contractionary shift in the LM curve.