Suppose the intersection of the IS and LM curves is to the right of the FE line. What would most likely eliminate a disequilibrium among the asset, labor, and goods markets?
a. A rise in the price level, shifting the LM curve up and to the left.
b. A fall in the price level, shifting the IS curve down and to the left.
c. A rise in the price level, shifting the IS curve up and to the right.
d. A fall in the price level, shifting the LM curve down and to the right.
Answer: A
FIN 201
- Whether real seignorage revenue increases when the rate of money growth increases depends on whether
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