In the IS-LM model, if interest rates fall while output falls the
a. money supply must have fallen.
b. price level must have fallen.
c. money supply must have risen.
d. level of government spending must have risen.
e. none of the above.
E
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The government purchases component of aggregate demand includes
I. all purchases by government agencies of goods and services produced by firms. II. direct production by government agencies themselves. III. government expenditures on transfer payments. A) I only B) I and II only C) I and III only D) I, II, and III
The two most common types of money in circulation in the United States today consist of
A) private bank notes and commodity-backed paper currency. B) commodity-backed paper currency and fiat money. C) fiat money and transaction deposits at banks. D) transaction deposits at banks and commodity money.