The IS curve is based on which of the following assumptions?

A) There is only one interest rate and income level at which the product market can be in equilibrium

B) Stock market prices are generally high when interest rates are low

C) Investment and savings decisions very inversely with income

D) Money market equilibrium can occur at any level of interest and income

The speculative demand for money is?

A) Money balances held for purposes of near future purchases

B) Money set aside to meet unexpected events

C) Money set aside to invest in the future

D) Money allocated for monthly expenses

The Keynesian multiplier concept reveals that?

A) As the money supply increases, prices go up. if the economy is at full employment

B) An increase in saving is generally followed by an increase in the tale of interest

C) An increase in investment causes a decrease in income and employment

D) An increase in general level of employment occurs with increased investment


The Loren curve shows that ……?

A) The medium income in the U S has consistently risen over time

B) Per capita income is increasing in the south east

C) The degree of income equality (or inequality) within an economy at any point of time

D) The unemployment level do not affect all ethic groups equally

The paradox of shift demonstrates that ……?

A) Thrift increases individual indebtedness

B) As the saving function shifts to the right, people save more and consume less

C) As income increases. upward movement occurs along the savings function

D) At higher rates of interest, people tend to save larger amounts of money