1)Assume that investment does not depend on the interest rate. A decrease in government spending will cause which

1)Assume that investment does not depend on the interest rate. A decrease in government spending will cause which

of the following for this economy?

Select one:

a. An increase in output.

b. An increase in the interest rate.

c. A decrease in investment.

d. No change in investment.

e. An increase in investment.

2)An increase in the aggregate price level,  P, will most likely have which of the following effects?

Select one:

a. A rightward shift in the IS curve.

b. A leftward shift in the IS curve.

c. An upward shift in the LM curve.

d. A downward shift in the LM curve.

e. A downward shift in the IS curve and an upward shift in the LM curve.

3)An increase in consumer confidence will likely have which of the following effects?

Select one:

a. A rightward shift in the IS curve.

b. A leftward shift in the IS curve.

c. An upward shift in the LM curve.

d. A downward shift in the LM curve.

e. A rightward shift in the IS curve and an upward shift in the LM curve.

4)For a closed economy, which of the following conditions must be satisfied for equilibrium to be maintained?

Select one:

a. Y = Z.

b. S = I.

c. X = Z.

d. G = T.

e. X = IM.

5)In the IS-LM model, an increase in the money supply will cause an increase in which of the following variables?

Select one:

a. Output.

b. Consumption.

c. Investment.

d. All of the above.

e. None of the above.







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