Macro IS LM

A decrease in government spending shifts the IS curve ____

• Neither left nor downward

• To the left

• To the right

• Either right or upward

In the short run, a monetary expansion leads to ____.

• A decrease in output

• No effect on output

• Either increase or decrease in output

• An increase in output

If M/P is unchanged, it must be that ____.

• M and P increased in the same proportion

• The increase in P < done the increase in M

• M is equal to P

• The increase in M > than the increase in P

Which of the following shifts the LM curve?

• T

• M

• P

• G

It reflects all combinations of i and Y where the goods market is in equilibrium

• Aggregate supply relation

• Aggregate demand relation

• IS relation

• LM relation

Given the central banks sale of bonds, which of the following would be a result of the simultaneous equilibrium in the economy?

• Upward shift of the IS curve

• Increase in interest rate

• Downward shift of the LM curve

• Increase in output

Given an increase in taxes, which of the following would be a result of the simultaneous equilibrium in the economy?

• Increase in output

• Increase in interest rate

• Downward shift of the IS curve

• Downward shift of the LM curve

Given an increase in government, which of the following would be a result of the simultaneous equilibrium in the economy?

• Decrease in interest rate

• Increase in output

• Downward shift of the IS curve

• Upward shift of the LM curve

In the short run, an increase in the level of interest rate leads to a fall in aggregate output

• True

• False

An increase in taxes leads to an upward shift of the IS curve

• True

• False