Assessment 2 (page 7 of 16)

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University of South Africa *

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2602

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Economics

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Nov 24, 2024

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Question 13 Answer saved Marked out of 1.00 Question 14 Answer saved Marked out of 1.00 Comparing the impact in the IS-LM model for a closed economy of a contractionary monetary policy with an expansionary fiscal policy on investment spending, the result is that: Select one: A. In both cases, investment spending decreases since the interest rate increases. B. In the case of monetary policy, investment spending is higher because the interest rate is higher. In the case of fiscal policy, investment spending is higher because the level of output and income is higher. C. In the case of monetary policy, investment spending is lower because the interest rate is higher. In the case of fiscal policy, investment spending is higher because the level of output and income is higher. D. In the case of monetary policy, investment spending is lower because the interest rate is higher. In the case of fiscal policy investment spending is indeterminate because the level of output and income is higher, and the interest rate is lower. Clear my choice This question is based on the following diagram: The diagram illustrates ______________ and _______________ . Select one: A. an expansionary fiscal policy; an expansionary monetary policy B. a contractionary fiscal policy; a contractionary monetary policy C. an expansionary fiscal policy; a contractionary monetary policy D. an increase in taxes; a decrease in the interest rate Clear my choice ◄ Assessment 1 Jump to... Assessment 3 ►  Dashboard / Courses / UNISA / 2023 / Semester 1 / ECS2602-23-S1 / Welcome to the ECS2602_2023 semester site / Assessment 2  Dashboard Calendar

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