Interest Rate 0 → I Ms 3 M₂ Mo M₁ Quantity of Money FIGURE 28-2 27 Refer to Figure 28-2. Starting at equilibrium Eo, an increase in real GDP will lead to downward movement along the MD curve and a lower interest rate. shift of the MD curve to the left and a fall in the interest rate. shift of the Mg curve to the left and an increase in the interest rate. shift of the Ms curve to the right and a fall in the interest rate. shift of the MD curve to the right and an increase in the interest rate.

Interest Rate 0 → I Ms 3 M₂ Mo M₁ Quantity of Money FIGURE 28-2 27 Refer to Figure 28-2. Starting at equilibrium Eo, an increase in real GDP will lead to downward movement along the MD curve and a lower interest rate. shift of the MD curve to the left and a fall in the interest rate. shift of the Mg curve to the left and an increase in the interest rate. shift of the Ms curve to the right and a fall in the interest rate. shift of the MD curve to the right and an increase in the interest rate.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1. Given the following information: Money supply (MS) = 1000; k0 = 300 - 500r; k1 = 0.5Y| a) Derive LM equation. b) Calculate national income at r = 5% and r = 10%. c) Calculate the slope of LM curve. c) Suppose money supply increase to 2000 explain the effect on the LM curve.
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Question 12 1 pts Other things equal, an increase in the money supply will: shift the AS curve to the right. cause a movement along a given AD curve. shift the AD curve to the left. shift the AD curve to the right.
Figure 16-6 Price level 104 100 LRAS, LRAS₂ SRAS, SRAS₂ AD₂ Refer to Figure 16-6. In the dynamic model of AD-AS in the figure above, if the economy is at 0 $10 11 11.3 Real GDP point A in year 1 and is expected to go to point B in year 2, Congress and the president would most likely O increase the money supply and decrease the interest rate. O increase taxes. ● increase government spending. O increase oil prices. Oraise interest rates.
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2 Illustrate a downward shift in the IS curve. Describe three factors that could shift the IS-curve.
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