According to the IS-LM model, what happens to the interest rate,income,consumption and investment when Government increase purchases and taxes by the same amount
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According to the IS-LM model, what happens to the interest rate,income,consumption and investment when Government increase purchases and taxes by the same amount
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- According to the IS-LM model, what happens to the interest rate,income,consumption and investmentWithin the IS-LM curve model, an increase in government spending financed by printing money will always a. have no impact on income. b. increase income. c. lower-income and raise the interest rate. d. increase the interest rate.According to the IS-LM model, what happens to the interest rate, income and consumption and investment under the circumstance that (a) the Central bank increases supply of money, and (b) the government increase government purchases?
- The Keynesian Y/AE model and the IS/LM model differ in terms of their treatment of investment production aggregate supply closed economy pricesWhich is not a dynamic of IS-LM Model • it takes some time an output to adjust to the new fiscal and monetary policies • It takes some time for consumption spending to adjust changes in disposable income • It will take time for an investment spending adjust to changes in interest rate • it will take some tome for a policy to change in order to adjust outputIf the government decides to increase spending on national defense, then in the IS-LM model the IS curve will shift right, the equilibrium interest rate will increase and the equilibrium output will go up. True or False
- Within the IS-LM curve model, if the government cut taxes at the same time that there was an autonomous increase in investment demand then a. income and the interest rate would rise. b. the interest rate would rise but the effect on income is uncertain. c. income would rise and the interest rate would fall. d. income would rise but the effect on the interest rate is uncertain.Based on the IS-LM model, show the graph and explain the effects on the equilibrium levels of income and interest rate when the Central Bank purchases government securities from the public.In the IS-LM model, when the government increases government purchases, the interest rate goes up; higher interest rate results in a decrease in tax revenues known as the "crowding out effect" true or false
- Why does interest rate links the two halves of the IS-LM model together?According to the IS–LM model, what happens to the interest rate, income, consumption, and investment under the following circumstances?a. The central bank increases the money supply.b. The government increases government purchases.c. The government increases taxes.In the IS-LM model, an equal increase in government expenditure and tax will ...... , ....... and ........ a. increase income / increase interest rate / reduce investment. b. reduce income / reduce interest rate / increase investment. c. increase income / increase interest rate / leave investment unchanged. d. reduce income / reduce interest rate / leave investment unchanged e. leave income unchanged / leave interest rate unchanged / reduce investment.