True or false. Explain. 1. For a given level of P (price), is M (nominal money) increases by 10%, M/P also increases by 10%. 2. A monetary expansion leads to a lower output and a higher interest rate. 3. Equilibrium in the financial market implies that an increase in income leads to a decrease in interest rate making the LM curve downward sloping.
True or false. Explain. 1. For a given level of P (price), is M (nominal money) increases by 10%, M/P also increases by 10%. 2. A monetary expansion leads to a lower output and a higher interest rate. 3. Equilibrium in the financial market implies that an increase in income leads to a decrease in interest rate making the LM curve downward sloping.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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True or false. Explain.
1. For a given level of P (
2. A monetary expansion leads to a lower output and a higher interest rate.
3. Equilibrium in the financial market implies that an increase in income leads to a decrease in interest rate making the LM curve downward sloping.
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