1. In the IS-LM model, in the special case where money demand is completely interest insensitive and the LM curve in vertical, an increase in the quantity of money will

   	A.	increase income but leave the interest rate unchanged.
   	B.	increase income and lower the interest rate.
   	C.	lower the interest rate but leave income unchanged.
   	D.	leave both income and the interest rate unchanged.

Answer rating: 100% (QA)

B increase income and lower the interest rate If money dem... View the full answer