Question
Which statement regarding the LM curve is incorrect?A country's economy is close to full employment. The government then decides to launch a tax cut program.
Which statement regarding the LM curve is incorrect?A country's economy is close to full employment. The government then decides to launch a tax cut program.
orice level and interest rate i in the short run?
a We can expect to remain unchanged, to remain unchanged, and to remain unchanged.
b None of the alternatives is correct.
c We can expect to increase, to increase, and to incrgase.
d We can expect to remain unchanged, to remain unchanged, and to increase.
e We can expect to decrease, to decrease, and to decrease.
a The LM curve shifts to the left when the central bank increases the reserve requirements for commercial
banks.
b The LM curve implies that high interest rates can be beneficial to the economy.
c The LM curve shifts to the left when the central bank buys government bonds from commercial banks.
d The LM curve shifts to the left when the general price index increases.
e The LM curve shifts to the left when the central bank sets a higher discount rate.
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