Ask Question
BusinessBusiness
14 June, 22:27

During 2008 in the United States, consumer confidence fell significantly. Which of the following will occur as a result of this reduction in consumer confidence?

A) the LM curve will shift up.

B) the LM curve will shift down.

C) the IS curve will shift rightward.

D) the IS curve will shift leftward.

E) the IS curve will shift rightward, and the LM curve will shift up.

+3
Answers (1)
  1. 15 June, 00:15
    0
    The correct answer is option D.

    Explanation:

    A reduction in consumer confidence will cause the IS curve to move leftwards. The IS curve is short for the investment savings curve. It shows the equilibrium in the goods market. It shows different combinations of interest rates and income where the goods market is in equilibrium.

    A change in consumer spending causes a shift in the IS curve. A reduction in consumer confidence will cause consumers to spend less. This reduction in consumer spending will further cause the IS curve to shift to the left.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “During 2008 in the United States, consumer confidence fell significantly. Which of the following will occur as a result of this reduction ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
Diana is managing the development of a mobile phone application. Half of the project work has been completed. Diana is currently reviewing her stakeholder management plan.
Answers (1)
Min applies for a job as a receptionist at an accounting firm. if she is denied a job because she is of asian origin, she may be a victim of
Answers (1)
Each of the following accounts is closed to Income Summary except Question 12 options: a. Expenses. b. Dividends. c. Revenues. d. All of these are closed to Income Summary.
Answers (1)
If a corporate bond with face value of $1,000 has an interest rate of seven percent paid once a year for a term of 10 years, what is the size of the coupon payment? $1,000 $700 $70 $7
Answers (1)
An investor buys a stock for $10,000 and earns dividends of $250 during the course of the year. At the end of the year, the stock is worth $9,300. The dividend yield for the year is a. - 7.0 percent b. 4.5 percent C.-2.5 percent. d. 2.5 percent
Answers (1)
New Questions in Business
Buckman Company uses the weighted average method for process costing. The cost per equivalent unit for direct materials is $5.00. The cost per equivalent unit for conversion costs is $3.00. The company completed and transferred out is 40,000 units.
Answers (1)
Which of the following transactions would be recorded if using the accrual basis of accounting but not if using the cash basis of accounting? A. Paying off loans B. Purchasing inventory on account C. Collecting customer payments D. Borrowing money
Answers (2)
Under ASC 606, the transaction price generally should be adjusted for the effect of the time value of money when A. A royalty contract with a distribution in which the consideration to be received depends on sales to end customers. B.
Answers (1)
ALT Inc. conducts periodic reviews of the distribution of pay and the favorable outcomes granted to employees, such as promotions and increased office space.
Answers (1)
If total liabilities increased by $6,000 and the assets increased by $8,000 during the accounting period, what is the change in the owner's equity amount? A. Decrease of $2,000 B. Decrease of $2,000 C. Increase of $10,000 D. Decrease of $10,000
Answers (1)
Home » Business » During 2008 in the United States, consumer confidence fell significantly. Which of the following will occur as a result of this reduction in consumer confidence? A) the LM curve will shift up. B) the LM curve will shift down.
Sign Up Forgot Password?