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Figure 4 -Refer to Figure 4 Above.Figure 4 Shows the IS-LM Model.Which

Question 36

Multiple Choice

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.

Correct Answer: