Exam 27: Web 2:the Islm Model

Everything else held constant,a monetary expansion is characterized by ________ output and ________ interest rates.

Using the ISLM model,explain and show graphically the effect of a fiscal expansion when the demand for money is completely insensitive to changes in the interest rate.What is this effect called?

If the economy is on the IS curve,but is to the left of the LM curve,aggregate output will ________ and the interest rate will ________.

An autonomous increase in money demand,other things equal,shifts the ________ curve to the ________.

If the ________ curve is relatively more unstable than the ________ curve,a money supply target is preferred.

An increase in the quantity of money supplied shifts the money supply curve to the ________ and the LM curve to the ________,everything else held constant.

An increase in the quantity of money supplied shifts the money supply curve to the ________,and the equilibrium interest rate ________,everything else held constant.

In the open-economy ISLM model,the goods market equilibrium condition is

In the basic closed-economy ISLM model,as the interest sensitivity of money demand increases,fiscal policy has ________ effect on output and monetary policy has ________ effect on output.

A decrease in the quantity of money supplied shifts the money supply curve to the ________,and the equilibrium interest rate ________,everything else held constant.

If the economy is characterized by a stable IS curve and an unstable LM curve,then ________ target produces ________ fluctuations in aggregate output.

In the basic closed-economy ISLM model,the goods market equilibrium condition is

Crowding out will be more pronounced the closer to vertical is the

In the long-run ISLM model and with everything else held constant,an increase in the money supply leaves the level of output and interest rates unchanged,an outcome called

In the long-run the ISLM model predicts that ________ can change real output.

If the Federal Reserve conducts open market ________,the money supply ________,shifting the LM curve to the right,everything else held constant.

Which of the followings does NOT describe the goods market in the ISLM model?

The more interest-sensitive is money demand,the

When the central bank ________ the money supply,the LM curve shifts to the right,interest rates ________,and equilibrium aggregate output ________,everything else held constant.

Despite an expansionary monetary policy,an economy experiences a recession.Everything else held constant,the recession could occur in spite of the rightward shift of the LM curve if