Author Question: We may infer from the downward slope of the IS curve that lower interest rates are associated with ... (Read 60 times)

karen · **on:** Jun 30, 2018

We may infer from the downward slope of the IS curve that lower interest rates are associated with ________.

A) higher output
B) higher saving and/or lower net exports
C) higher investment
D) all of the above
E) none of the above

Question 2

With autonomous changes in the policy interest rate, the Federal Reserve cannot determine the long run equilibrium level of the real interest rate or potential output and will only be able to determine inflation.

This statement is consistent with ________. A) the notion that shifts in the MP curve may lead to shifts in the AD and AS curves but the LRAS remains unchanged
B) the notion of long-run independence between nominal and real variables
C) the notion of monetary neutrality
D) all of the above
E) none of the above