In the IS–LM model under the usual conditions in a closed economy, an increase in government spending increases the interest rate and crowds out:

Related MCQs

• In the IS–LM model, the impact of an increase in government purchases in the goods market has ramifications in the money market, because the increase in income causes a(n) in money             .
• An economy is at equilibrium output when
• When using AD/AS analysis to illustrate changes within an economy, which of the following would NOT need to be considered when looking at changes to economic growth?
• An increase in aggregate demand (given no change in aggregate supply) will cause                            inflation.
• An example of a government expenditure is
• under fisher's quantity theory of money,M denoted
• In the quantity theory of money, P and Y represent the price and quantity of:
• If inflation is 6% and you receive a 1% raise in your nominal wage, by how much did your real wage change?
• If inflation is 1% and you receive a 1% raise in your nominal wage, by how much did your real wage change?
• A decrease in the price level shifts the               curve to the right, and the aggregate demand curve .