UGC NET Economics Q75

Question

Which of the followings are the effects of increase in government spending in IS-LM framework in a closed economy?
A. Increase in income by multiplier times government expenditure.
B. Shift in IS curve to the right leading to disequilibrium in money market at given level of interest rate.
C. Quantity of money demand will be higher.
D. Interest rate will decrease.
E. Private investment will increase leading to increase in aggregate demand.
Choose the correct answer from the options given below:

Accepted Answer

B, D & E Only