Ask Question
20 April, 00:07

In the IS-LM model, a decrease in the interest rate would be the result of a (n) : increase in government purchases. increase in the money supply. decrease in taxes. increase in money demand.

+2
Answers (1)
  1. 20 April, 03:47
    0
    Increase in money supply

    Explanation:

    Option - A: If there is a decrease in the interest rate, government purchases will decrease in the IS-LM model. Therefore, it is not the answer.

    Option - B: As the interest rate decreases, people will borrow more money from the bank. The money will be flown quickly; therefore, the money supply will increase. So, it is the answer.

    Option - C: There will be an increase in taxes. Therefore, it is not the answer.

    Option - D: As there is an increase in the money supply, the opposite will happen with the money demand. Therefore, it cannot be the answer.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “In the IS-LM model, a decrease in the interest rate would be the result of a (n) : increase in government purchases. increase in the money ...” 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