12. Which of the following statements is correct? a. An increases in the level of autonomous spending shifts the LM curve to the right b. An increase in the level of autonomous spending shifts the LM curve to the left c. An increase in the level of autonomous spending shifts the IS curve to the left d. An increase in the level of autonomous spending shifts the IS curve to the right 13. An increase in government spending will a. Increase nominal money supply, thereby increasing real money supply and shifting the IS curve to the right b. Increase real money supply, thereby increasing real money supply and shifting the IS curve to the left c. Increase nominal money supply, thereby increasing real money supply and shifting the LM curve to the right d. Increase real money supply, thereby increasing real money supply and shifting the LM curve to the right 14. Expansionary monetary policy will a. Increase M and reduce the equilibrium demand for money b. Decrease M and reduce the equilibrium interest rate c. Increase M and reduce the equilibrium interest rate d. Only affect nominal money supply but not the equilibrium interest rate 15. Points to the left of the IS curve represent locus where a. AD>Y b. Y>AD c. Y=AD d. Both a and c
12. Which of the following statements is correct? a. An increases in the level of autonomous spending shifts the LM curve to the right b. An increase in the level of autonomous spending shifts the LM curve to the left c. An increase in the level of autonomous spending shifts the IS curve to the left d. An increase in the level of autonomous spending shifts the IS curve to the right 13. An increase in government spending will a. Increase nominal money supply, thereby increasing real money supply and shifting the IS curve to the right b. Increase real money supply, thereby increasing real money supply and shifting the IS curve to the left c. Increase nominal money supply, thereby increasing real money supply and shifting the LM curve to the right d. Increase real money supply, thereby increasing real money supply and shifting the LM curve to the right 14. Expansionary monetary policy will a. Increase M and reduce the equilibrium demand for money b. Decrease M and reduce the equilibrium interest rate c. Increase M and reduce the equilibrium interest rate d. Only affect nominal money supply but not the equilibrium interest rate 15. Points to the left of the IS curve represent locus where a. AD>Y b. Y>AD c. Y=AD d. Both a and c
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Transcribed Image Text:12. Which of the following statements is correct?
a. An increases in the level of autonomous spending shifts the LM curve to the right
b. An increase in the level of autonomous spending shifts the LM curve to the left
c. An increase in the level of autonomous spending shifts the IS curve to the left
d. An increase in the level of autonomous spending shifts the IS curve to the right
13. An increase in government spending will
a. Increase nominal money supply, thereby increasing real money supply and shifting the IS curve to
the right
b. Increase real money supply, thereby increasing real money supply and shifting the IS curve to the
left
c. Increase nominal money supply, thereby increasing real money supply and shifting the LM curve
to the right
d. Increase real money supply, thereby increasing real money supply and shifting the LM curve to the
right
14. Expansionary monetary policy will
a. Increase M and reduce the equilibrium demand for money
b. Decrease M and reduce the equilibrium interest rate
c. Increase M and reduce the equilibrium interest rate
d. Only affect nominal money supply but not the equilibrium interest rate
15. Points to the left of the IS curve represent locus where
a. AD>Y
b. Y>AD
c. Y=AD
d. Both a and c
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