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Blanchard: Chapter 5 (English) Flashcards | StudBud
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Blanchard: Chapter 5 (English)
Blanchard: Chapter 5 (English)
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Answers
1
Slope of IS curve: - (1 - c
1
- b
1
) / b
2
< 0 How does IS curve look like when b
2
is very small and approaches zero?
Positive slope
downward sloping, The slope is -1
Horizontal line
Vertical line
2
Which variables are endogenous in the IS -LM model?
Y and i
Y and G
Y, T and G
c0, Y and G
3
When the central bank icreases money supply, the LM curve shifts to the right.
False
True
4
The government increases taxes (T↑).
Y up i up
Y down i up
Y up i down
Y down i down
5
Chapter 5: Tax revenues depend on GDP
True
False
6
The government increases taxes (T↑).
LM left
LM right
IS left
IS right
7
The LM curve has a positive slope.
True
False
8
Chapter 5: The investment function depends on the interest rate.
False
True
9
The slope of the IS curve is given by
1 / (1 - c1) > 0
- (1 - c1 - b1) / b2 < 0
- c1 / (1 - c1) < 0
a 45 * - line
10
Income Multiplier & Cramer: We insert the solution vector into the
Numerator 2. column
Denominator 2. column
Numerator 1. column
Denominator 1. column
11
The IS curve shifts to the right, when government increases government spending (G↑).
True
False
12
Money demand depends on the interest rate.
True
False
13
Chapter 5: The investment function depends on the GDP level.
False
True
14
The IS curve shifts to the right, in case that c
0
↑, T↑, b
0
↑, or G↑.
True
False
15
Real money supply depends on GDP.
False
True
