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

question 79

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 shift:

• A) only the LM curve.
• B) only the IS curve.
• C) both the LM and the IS curves.
• D) neither the LM nor the IS curve.

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Definitions:

Wish-Fulfillment Theory

A psychological theory suggesting that dreams represent the unconscious desires and wishes of the dreamer.

Manifest Content

In psychoanalysis, the manifest content is the literal storyline or surface meaning of a dream, as remembered by the dreamer.

Latent Content

The hidden psychological meaning of dreams, as distinguished from their manifest content.

Memory Consolidation

The process by which initial fragile memory states are transformed into stable, long-term memories.