In the context of the IS-LM model, assume that the aggregate price level falls. Based solely on this, choose the correct option. O Agents start buying bonds because they need less money for transactions, leading to a rise in the interest rate and, thus, a rise in output. Agents start selling bonds to make more transactions, leading to a rise in the interest rate and, thus, a fall in output. The interest rate tends to fall, leading to a rise in output. The interest rate tends to increase, leading to a fall in output.

In the context of the IS-LM model, assume that the aggregate price level falls. Based solely on this, choose the correct option. O Agents start buying bonds because they need less money for transactions, leading to a rise in the interest rate and, thus, a rise in output. Agents start selling bonds to make more transactions, leading to a rise in the interest rate and, thus, a fall in output. The interest rate tends to fall, leading to a rise in output. The interest rate tends to increase, leading to a fall in output.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Q. 4
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The JSE tracked firmer global peers on Wednesday as anxiety surrounding the global banking sector eased, in part due to policymakers’ efforts to secure deposits and provide liquidity. However, analysts have warned that concerns about higher rates pushing the global economy into recession are still evident. “Markets continue to show a solid rebound as regulators continue to address fears around the banking sector,” said Matete Thulare, head of forex execution at RMB. “We may be in a mini-banking crisis but for now there seems to be little bad news to absorb, which helps sentiment,” Thulare added. “However, the biggest catalyst lies in Federal Reserve expectations.” The JSE all share gained 0.57% to 76,480.11 points, with industrials adding 0.97% and industrial metals 0.75%. However, banks, precious metals and financials fell 0.42%, 0.33% 0.12% respectively. The top 40 rose 0.6%. Michael Barr, the Federal Reserve’s vice- chair for supervision, on Tuesday blamed the collapse of Silicon…
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