Other Things Equal, a Given Change in Money Supply Has

question 124

Multiple Choice

Other things equal, a given change in money supply has a larger effect on demand the:

• A) larger the income sensitivity of money demand.
• B) smaller the income sensitivity of money demand.
• C) flatter the LM curve.
• D) steeper the IS curve.

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Definitions:

Leap Years

Years with an extra day (February 29) added to keep the calendar year synchronized with the astronomical year or seasonal year.

Interest Computation

The process of calculating the interest due on a loan, based on the principal, interest rate, and time.

Lending Institution

An organization that provides financial loans to individuals or businesses, expecting repayment with interest.

Discounted

The process of determining the present value of a payment or a series of payments that will be made in the future, taking into consideration a specific interest rate.