Suppose the intersection of the IS and LM curves is to the left 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
B
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We shouldn't be concerned about U.S. currency held abroad because
A) the currency will never return to the United States. B) foreigners use it to buy U.S. bonds. C) it represents an interest-free loan to the United States. D) foreigners can't spend it in their own countries.
A couple refuses to mow their lawn. Their neighbors take them to court, arguing using the logic of economic theory that
a. property rights are poorly defined because externalities exist b. they are free riders and entitled to the value of the externalities c. although there are no third parties because property rights are clear, the market still generates market failure d. although property rights are clear, there are still externalities that should be considered e. market failure can be avoided if the couple sells their property to any of the neighbors