Suppose we have normally-sloped IS and LM curves intersecting at point A. Then a monetary policy change shifts the LM curve to the right. Directly below point A we find a point on the new LM curve that shows us
A) where the new IS-LM equilibrium occurs.
B) how much the interest rate must fall to raise planned expenditures to the new equilibrium income.
C) how much the interest rate must fall to by itself raise the demand for money by as much as the money supply has decreased.
D) how much income must rise to by itself raise the demand for money by as much as the money supply has increased.
E) how much the interest rate must fall to by itself lower the demand for money by as much as the money supply has decreased.
C
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The International Monetary Fund
A. is a multinational organization that aims to promote world economic growth through more financial stability. B. is the bank that causes international financial crisis when the reserves are too high. C. is a central bank like the Federal Reserve System. D. is a multinational agency that specializes in making loans to promote long-term development and growth in developing countries.