If the LM Curve Is Vertical and Government Spending Rises

question 17

Multiple Choice

If the LM curve is vertical and government spending rises by G, in the IS-LM analysis, then equilibrium income rises by:

• A) G/(1 - MPC).
• B) more than zero but less than G/(1 - MPC).
• C) G.
• D) zero.

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Definitions:

Christian Scholarship

The integration of Christian faith and intellectual pursuits, aimed at understanding or interpreting Christian doctrine and the Bible in an academic context.

Society

A complex network of individuals and groups interacting with each other, adhering to shared norms and values, and structured into various institutions.

Charles de Montesquieu

An 18th-century French philosopher known for his theory of separation of powers, which influenced modern democratic governments.

Thomas Hobbes

An English philosopher best known for his work "Leviathan," where he discusses the structure of society and legitimate government, and argues for a social contract and rule by an absolute sovereign.