Author Question: An expected reduction in the money supply will tend to cause A) an increase in stock prices. B) ... (Read 73 times)

lindiwe · **on:** Jun 30, 2018

An expected reduction in the money supply will tend to cause

A) an increase in stock prices.
B) a reduction in stock prices.
C) no change in stock prices.
D) an ambiguous effect on stock prices.

Question 2

Suppose fiscal policy makers implement a policy to reduce the size of a budget deficit. Based on the IS-LM model, we know with certainty that the following will occur as a result of this fiscal policy action.

A) Investment spending will decrease.
B) Investment spending will increase.
C) There will be no change in investment spending.
D) Investment spending may increase, decrease, or not change.
E) none of the above