In an IS-LM framework, fiscal expansion generally leads to income expansion
A)only if it is combined with monetary expansion
B)except if we are in the liquidity trap
C)but interest rates will increase, leading to a lower level of saving
D)but the composition of output will change
E)but most consumption spending will be crowded out

Question

Quizplus · Accepted Answer

The Answer of In an IS-LM framework, fiscal expansion generally leads to income expansion
A)only if it is combined with monetary expansion
B)except if we are in the liquidity trap
C)but interest rates will increase, leading to a lower level of saving
D)but the composition of output will change
E)but most consumption spending will be crowded out

In an IS-LM Framework, Fiscal Expansion Generally Leads to Income