Y, increased sharply. We want to figure out what factors
During 2005, the U.S. aggregate real income, Y, increased sharply. We want to figure out what factors
may have contributed to that income increase. Suppose that we know that the LM curve did not shift during that year and that the markets for money and for goods and services were both in equilibrium at all times. Which one of the following factors could have caused the increase in income in this situation?
a.A temporary decrease in the domestic nominal interest rate.
b.An increase in the expected return on investment.
c.A temporary increase in the domestic price level.
d.A temporary increase in net taxes.
e.All of the above.