Figure 4 Refer to figure 4 above. Figure 4 shows the IS-LM model. Which of the following statements about the figure is NOT true? A) The figure shows the economy would be in general equilibrium when the interest rate is i₁ and the level of national income is Y₁. B) The figure shows that an expansionary monetary policy will lead to an increase in national income and an increase in interest rates. C) The figure shows that an expansionary fiscal policy will lead to an increase in national income and an increase in interest rates. D) The figure shows the effect of an increase in autonomous expenditure.

Question

Quizplus · Accepted Answer

The Answer of Figure 4 Refer to figure 4 above. Figure 4 shows the IS-LM model. Which of the following statements about the figure is NOT true? A) The figure shows the economy would be in general equilibrium when the interest rate is i₁ and the level of national income is Y₁. B) The figure shows that an expansionary monetary policy will lead to an increase in national income and an increase in interest rates. C) The figure shows that an expansionary fiscal policy will lead to an increase in national income and an increase in interest rates. D) The figure shows the effect of an increase in autonomous expenditure.

Figure 4 ​ ​

Figure 4