SESSICIN A: U-IDDSE THE BEST ANSWER 1. \"Due l5 curve represents A. the single level of output where the goods market is in equilibrium. B. the single level of output where nancial markets are in equilibrium. C. the combinations of output and the interest rate where the money market is in equilibrium. D. the combinations of output and the interest rate where the goods market is in equilibrium. 2. The IS curve will shiFt to the right when which of the following occurs? A. an increase in the money supply B. an increase in government spending C. a reduction in the interest rate D. all of the above. 3. which of the following occurs as the economy moves leftward along a 'ven l5 curve? A. an increase in the interest rate causes investment spending to decrease B. an increase in the interest rate causes money demand to increase (I. an increase in the interest rate causes a reduction in the money supply D. a reduction in government spending causes a reduction in demand for goods 4. Which of the following statements is oonsistent with a given {i.e., xed] Ll'vl curve? A. a reduction in the interest rate causes investment spending to increase B. a reduction in the interest rate causes money demand to decrease C. an increase in output causes money demand to increase D. an increase in outpli causes an increase in demand for good 5. Suppose the economy is currently operating on both the LM curve and the IS curve. Which of the following is true for this economy? A. Production equals demand. B. 'lhe money supply equals money demand. C. nancial markets are in equilibrium. D. all of the above