Econ Fina.l

Front 1

if congress passed a tax increase at the request of the president to rduce the budget deficit, but the Fed held the money supply constant, then the two policies together would generally lead to ___income and a ___interest rate

Back 1

lower, lower

Front 2

the great depression of the U.S.

Back 2

cannot be considered to have started becasue of a leftward shift in the LM curve because real balances did not fall between 1929 and 1931

Front 3

a tax cut combined with tight money, as was the case in the early 80's, should lead to

Back 3

a rise in the real interest rate and a fall in investment

Front 4

according to the theory of liquidity preference, the supply of real money balances:

Back 4

is fixed

Front 5

the IS curve may be interpreted as showing the:

Back 5

interest rate that equilibrates the market for loanable funds for given income

Front 6

the LM curve, in the usual case:

Back 6

slopes to the right

Front 7

according to the quantity equation, if velocity is not assumed to be constant and money supply is held constant, then an increase in the interest rate___velocity and ____income

Back 7

increases, increases

Front 8

The IS and LM curves together generally determine

Back 8

both income and interest rate