Suppose the Fed reduces the money supply in the current period ...

[AEWBW]

Suppose the Fed reduces the money supply in the current period with no other policy change implemented or anticipated. This policy action will cause which of the following shifts in the IS and/or LM curves in the current period?
 
  A) IS left; LM up
  B) IS right; LM up
  C) no shift in IS; LM up
  D) IS left; LM down
  E) IS right; LM down

Question 2

The mortgage is said to be underwater when
 
  A) the value of the house exceeds the value of the mortgage.
  B) the house is flooded.
  C) the value of the mortgage exceeds the value of the house.
  D) none of the above

[katieost]

Answer to Question 1

C

Answer to Question 2

C