Question

Suppose there is a reduction in the expected future interest rate. This will cause which of...

Suppose there is a reduction in the expected future interest rate. This will cause which of the following to occur? A. the LM curve to shift down in the current period
B. the LM curve to shift up in the current period
C. the IS curve to shift right in the current period
D. the IS curve to shift left in the current period

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Taxing capital will A) decrease the expected marginal product of capital, shift the IS curve down...
Taxing capital will A) decrease the expected marginal product of capital, shift the IS curve down and to the left B) decrease tax-adjusted user cost of capital, shift the LM curve down and to the left C) increase tax-adjusted user cost of capital, shift the IS curve up and to the right D) increase the expected marginal product of capital, shift the LM curve up and to the right explanations please
1). Suppose in Pakistan the macroeconomic variables i* (foreign interest rate), P (domestic aggregate price level),...
1). Suppose in Pakistan the macroeconomic variables i* (foreign interest rate), P (domestic aggregate price level), P* (foreign aggregate price level), Y* (foreign income level), straight pie (domestic expected inflation), T (domestic net taxes), and G (domestic government spending) are exogenously given, the interest parity condition holds, and the expectations of the future economic trends remain unchanged. In this situation, if the foreign aggregate price level, P*, declines, the IS curve a. would not shift. b. would shift to the...
24) An increase in government spending will likely have which of the following effects? A) a...
24) An increase in government spending will likely have which of the following effects? A) a rightward shift in the IS curve B) a leftward shift in the IS curve C) an upward shift in the LM curve D) a downward shift in the LM curve 25) If government spending and taxes increase by the same amount, A) the IS curve does not shift B) the IS curve shift leftward C) the IS curve shifts rightward D) the LM curve...
1) Suppose the central bank pursues restrictive monetary policy. Then: a. The IS curve shifts right...
1) Suppose the central bank pursues restrictive monetary policy. Then: a. The IS curve shifts right b. The IS curve shifts left c. The LM curve shifts right d. The LM curve shifts left 2. Which of the following would not cause the IS curve to shift to the left? a. a decrease in government expenditures b. a decrease in the money supply c. an increase in the domestic price level d. an increase in taxes 3)Under fixed exchange rates,...
3) Which of the following occurs as the economy moves leftward along a given IS curve?...
3) Which of the following occurs as the economy moves leftward along a given IS curve? A) An increase in the interest rate causes investment spending to decrease. B) An increase in the interest rate causes money demand to increase. C) An increase in the interest rate causes a reduction in the money supply. D) A reduction in government spending causes a reduction in demand for goods. E) An increase in taxes causes a reduction in demand for goods. 5)...
20) Which of the following best defines the LM curve? A) the combinations of i and...
20) Which of the following best defines the LM curve? A) the combinations of i and Y that maintain equilibrium in the goods market B) illustrates the effects of changes in i on investment C) illustrates the effects of changes in i on desired money holdings by individuals D) the combinations of i and Y that maintain equilibrium in financial markets 21) Based on our understanding of the IS-LM model that takes into account dynamics, we know that a reduction...
A decrease in the expected price level a. will cause the aggregate demand curve to shift...
A decrease in the expected price level a. will cause the aggregate demand curve to shift to the left but an increase in the actual price level does not cause shifting. b. will cause the aggregate demand curve to shift to the right but an increase in the actual price level will not cause shifting. c. will cause the aggregate demand curve to shift to the left and an increase in the actual price level will also cause shifting to...
Which of the following statements is true? a)Assuming all else equal, if a household is optimistic...
Which of the following statements is true? a)Assuming all else equal, if a household is optimistic about future income, it is likely to cause a left shift of the current credit demand curve of the household. b)John makes it a point to save a portion of his salary every month. Assuming all else equal, if the real interest rate increases, it is likely to cause John's credit supply curve to shift to the left. c)Everything else remaining unchanged, if households...
Suppose that the central bank can influence expectations about inflation by promising to increase the money...
Suppose that the central bank can influence expectations about inflation by promising to increase the money supply in the future. In a liquidity trap,the central bank promising to increase the money supply in the future would cause___________(increase, decrease or not change) in expected​ inflation,which in the current period ___________(would cause a shift to the left; would cause a shift to the right; would cause no change ; may cause the shift to left, the shift to right or no change)...
Q.1 In the medium run, which of the following expressions will represent the nominal interest rate?...
Q.1 In the medium run, which of the following expressions will represent the nominal interest rate? a. rn - π e. b. rn+ gm . c. rn. d. gY+ gm . e. rn + π T. Q.2 Suppose individuals expect that interest rates will fall in the future. Also assume that the RBA wants to prevent any change in current output. Given this goal of the RBA, the RBA should implement a policy in the current period that: a. shifts...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT