Suppose the central bank decides to conduct an open market sale of bonds. Which of the following will occur as a result of this monetary policy action?
A) The LM curve shifts up.
B) The LM curve shifts down.
C) The IS curve shifts leftward as the interest rate decreases.
D) The IS curve shifts rightward as the interest rate increases.
E) The LM curve shifts up and the IS curve shifts leftward.
Correct Answer:
Verified
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