Expenditure and Interest Rates ES20013 Intermediate Macro 1: Week 1 Quiz
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Questions and Answers

The LM relationship reflects both monetary policy and the supply of goods. True or False?

False

The classic LM curve is based on the demand for goods and supply of money. True or False?

True

The IS curve combines the definition of national income with simple consumption and simple investment functions. True or False?

True

If consumption becomes more sensitive to output, it will affect the slope of the IS curve. True or False?

<p>True</p> Signup and view all the answers

The LM curve only uses a description of how Central Banks currently set interest rates. True or False?

<p>True</p> Signup and view all the answers

The IS-LM model allows us to analyze the interest rate, true or false?

<p>True</p> Signup and view all the answers

The IS-LM model assumes that prices are fixed, true or false?

<p>True</p> Signup and view all the answers

The weaknesses of the IS-LM model prevent its extensive use, true or false?

<p>False</p> Signup and view all the answers

The IS relationship in the IS-LM model reflects expenditure and its relationship with the _____________ .

<p>False</p> Signup and view all the answers

The IS-LM model can be used to explore the effects of government expenditure and taxes, true or false?

<p>True</p> Signup and view all the answers

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