In the IS-LM Model, a Decrease in the Interest Rate

question 23

Multiple Choice

In the IS-LM model, a decrease in the interest rate would be the result of a(n) :

• A) increase in the money supply.
• B) increase in government purchases.
• C) decrease in taxes.
• D) increase in money demand.

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Definitions:

Operating Cash Flow

denotes the cash generated from a company’s normal business operations, indicating whether a company can maintain and grow its operations.

NPV

Net Present Value; a method used in capital budgeting to evaluate the profitability of an investment or project.

IRR

The Internal Rate of Return is a financial indicator utilized to evaluate the potential returns of investments.

Bid Price

The highest price that a buyer is willing to pay for a security.