Danh sách tài liệu

1. The relationship between the interest rate and the level of income that equilibrates the money market is called the:

• LM curve.
• IS curve.
• aggregate demand curve.
• aggregate supply curve.

2. Suppose that the LM curve is vertical. An increase in taxes will:

• decrease the interest rate and leave income unchanged.
• decrease income and leave the interest rate unchanged.
• increase income and leave the interest rate unchanged.
• increase the interest rate and leave income unchanged.

3. The investment function and the IS curve slope:

• downward because higher interest rates induce more investment.
• upward because higher interest rates induce less investment.
• upward because higher interest rates induce more investment.
• downward because higher interest rates induce less investment.

4. Suppose that the government raises taxes. According to the IS–LM model, what would the central bank have to do to keep income constant and what would be the subsequent effect on interest rates?

• The central bank needs to increase the money supply; interest rates remain unchanged.
• The central bank needs to decrease the money supply; interest rates remain unchanged.
• The central bank needs to increase the money supply; interest rates go down.
• The central bank needs to decrease the money supply; interest rates go up.

5. The LM curve is drawn for a given:

• interest rate.
• nominal income.
• money supply.
• real income.

6. If the marginal propensity to consume is large, then the:

• IS curve is relatively steep.
• LM curve is relatively steep.
• LM curve is relatively flat.
• IS curve is relatively flat.

7. According to the IS–LM model, an increase in government purchases causes a(n):

• decrease in income and an increase in the interest rate.
• decrease in income and a decrease in the interest rate.
• increase in income and a decrease in the interest rate.
• increase in income and an increase in the interest rate.

8. If the central bank increased the money supply, then the LM curve would:

• become flatter.
• shift downward.
• shift upward.
• become steeper.

9. At the point where the IS curve and the LM curve intersect, the:

• the money market is in equilibrium.
• the money and the goods market are in equilibrium.
• the goods market is in equilibrium.
• the labor market is in equilibrium.

10. The relationship between interest rates and the level of income that brings the goods and services market into equilibrium is called the:

• aggregate supply curve.
• LM curve.
• IS curve.
• aggregate demand curve.