In the closed economy IS-LM model, how would the responsiveness of money demand to a change in output relate to the degree of crowding out after an increase in government spending? Select one: a. The less responsiveness money demand is to a change in output, the greater the degree of crowding out after an increase in government spending b. If money demand is high then crowding out is high. c. The more responsiveness money demand is to a change in output, the greater the degree of crowding out after an increase in government spending d. The responsiveness of money demand to a change in output has no bearing on the degree of crowding out after an increase in government spending
In the closed economy IS-LM model, how would the responsiveness of money demand to a change in output relate to the degree of crowding out after an increase in government spending? Select one: a. The less responsiveness money demand is to a change in output, the greater the degree of crowding out after an increase in government spending b. If money demand is high then crowding out is high. c. The more responsiveness money demand is to a change in output, the greater the degree of crowding out after an increase in government spending d. The responsiveness of money demand to a change in output has no bearing on the degree of crowding out after an increase in government spending
Chapter20: Exchange Rates And The Macroeconomy
Section: Chapter Questions
Problem 4DQ
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In the closed economy IS-LM model, how would the responsiveness of money demand to a change in output relate to the degree of crowding out after an increase in government spending?
Select one:
a.
The less responsiveness money demand is to a change in output, the greater the degree of crowding out after an increase in government spending
b.
If money demand is high then crowding out is high.
c.
The more responsiveness money demand is to a change in output, the greater the degree of crowding out after an increase in government spending
d.
The responsiveness of money demand to a change in output has no bearing on the degree of crowding out after an increase in government spending
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