Two interpretations of the IS-LM model are that the model explains:
A) the determination of income in the short run when prices are fixed or what shifts the aggregate demand curve.
B) the short-run quantity theory of income or the short-run Fisher effect.
C) the determination of investment and saving or what shifts the liquidity preference schedule.
D) changes government spending and taxes or the determination of the supply of real money balances.
Correct Answer:
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Q1: In the Keynesian-cross model, actual expenditures differ
Q2: According to the analysis underlying the Keynesian
Q5: According to classical theory, national income depends
Q6: When drawn on a graph with Y
Q8: The Keynesian cross shows:
A) determination of equilibrium
Q11: With planned expenditure and the equilibrium condition
Q15: Planned expenditure is a function of:
A) planned
Q17: In the IS-LM model, which two variables
Q17: The equilibrium condition in the Keynesian-cross analysis
Q23: In the Keynesian-cross model, if government purchases
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