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When the LM-Curve Is Vertical

Question 19

Multiple Choice

When the LM-curve is vertical,


A) the monetary policy multiplier is zero
B) monetary policy is at its weakest but fiscal policy has a maximum effect on income
C) monetary policy has a maximum effect, but fiscal policy has no effect on income
D) fiscal policy's impact on interest rates will not affect investment
E) monetary policy affects interest rates but no change in investment spending results

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