Economics · Macroeconomics
Consider the following statements regarding the IS-LM Model: 1. A Fiscal Policy stimulus (e.g., a massive infrastructure spending program) will shift the IS Curve to the right. 2. If the LM Curve is perfectly vertical (the Classical Case), a rightward shift of the IS Curve will primarily lead to an increase in the Rate of Interest with no change in National Income. 3. If the LM Curve is perfectly horizontal (the Liquidity Trap Case), Monetary Policy is highly effective in increasing National Income. Which of the statements given above is/are correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 11, 2, and 3
- 21 and 3 only
- 32 and 3 only
- 41 and 2 only✓
Correct answer
1 and 2 only
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Economics?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Macroeconomics MCQs →Want more practice questions on Macroeconomics?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Economics · Macroeconomics