Author Question: In the Keynesian theory, an exogenous decrease in the demand for money shifts a. the LM curve to ... (Read 50 times)

michelleunicorn · **on:** Jun 30, 2018

In the Keynesian theory, an exogenous decrease in the demand for money shifts

a. the LM curve to the right.
b. the LM curve to the left.
c. the IS curve to the right.
d. the IS curve to the left.
e. neither the IS or LM curves.

Question 2

An increase in real dividend income minus taxes represents

A) a pure substitution effect.
B) a pure income effect.
C) a combination of income and substitution effects.
D) neither a pure income effect nor a pure substitution effect.