Author Question: Suppose there is a simultaneous reduction in expected future output and reduction in the future ... (Read 100 times)

rachel9 · **on:** Jun 30, 2018

Suppose there is a simultaneous reduction in expected future output and reduction in the future expected interest rate. This will cause which of the following to occur?

A) the IS curve to shift left in the current period
B) the IS curve to shift right in the current period
C) the LM curve to shift up in the current period
D) the LM curve to shift down in the current period
E) an ambiguous effect on the position of the IS curve in the current period

Question 2

AIG provide CDS against

A) insolvency.
B) default risk.
C) illiquidity.
D) none of the above