In the IS-LM Model When Government Spending Rises, in Short-Run

question 29

Multiple Choice

In the IS-LM model when government spending rises, in short-run equilibrium, in the usual case the interest rate ______ and output ______.

• A) rises; falls
• B) rises; rises
• C) falls; rises
• D) falls; falls

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Definitions:

Defense Mechanisms

Psychological strategies used unconsciously by individuals to protect themselves from anxiety and to manage emotional conflict and external stressors.

Lymph Tissue

A vital part of the immune system, made up of organs and cells that produce, store, and carry cells that fight infection.

Preoperational

Referring to Piaget's stage of cognitive development in children aged 2-7, characterized by symbolic thinking and difficulty understanding others' perspectives.

Secondary Circular Reaction

A stage in Piaget's theory of cognitive development where infants (4-8 months) repeat actions to get desired outcomes, showing the beginning of intentional behavior.