Suppose the intersection of the IS and LM curves is to the right of the FE line. What would most likely eliminate a disequilibrium among the asset, labor, and goods markets?
A) A rise in the price level, shifting the LM curve up and to the left.
B) A fall in the price level, shifting the LM curve down and to the right.
C) A rise in the price level, shifting the IS curve up and to the right.
D) A fall in the price level, shifting the IS curve down and to the left.
A
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In the short run, which of the following statements is correct?
A. The marginal cost curve intersects the average variable and average fixed cost curves at their minimum points. B. Average variable cost declines continuously as total output is expanded. C. Total cost will exceed variable cost. D. If the inputs of all resources are increased by equal amounts, total output will expand by diminishing amounts.
If taxes are $2,000 when income is $15,000 and they are $3,000 when income is $19,000, then the marginal tax rate is:
A. 20 percent B. 25 percent C. 30 percent D. 40 percent