Skip to content
We use only essential cookies to keep you signed in and remember your preferences. See our Cookie Policy.
TestStop
MocksPracticeResourcesIndiaBlogPricing
Sign in
Questions › JNU › JNU SSS 2018 › Q50
15 marksMacroeconomics › IS-LM model › Extensions: expected inflation, endogenous money and rate targetingHard

JNU SSS 2018 Question 50: IS-LM model

Answer any one of the following in not more than 500 words :

What shape does the LM curve take when the central bank fixes the interest rate instead of the money supply? How does monetary policy work in such an economy?

Answer and worked solution

Checking your account…

IS-LM model has come up 137 times in 7 exams since 2004.

What this question tests

This question is on Extensions: expected inflation, endogenous money and rate targeting, part of IS-LM model in Macroeconomics.

Variations on the basic model: inflation expectations, money supply that responds, and central banks that target the rate.

TestStop has 14 past-paper questions on this subtopic; the nearest in year are below.

  • GATE 2023 · Q47Consider a closed-economy IS-LM model. The IS and LM equations are Y = C(Y) + I(z) + Ḡ M̄/P̄ = kY - li…
Practise IS-LM modelMore on Extensions: expected inflation, endogenous money and rate targeting

Similar questions from other papers

  • CUET-PG 2026 · Q13The interest rate and price level are jointly determined by simultaneous equilibrium of:
  • GATE 2026 · Q51Consider the following IS-LM model where, C₀ is autonomous consumption, c is marginal propensity to consumption, T₀ is the autonomous tax, t is the tax rate on income…
  • IIT JAM 2026 · Q23Consider a closed economy IS-LM model with downward sloping IS curve. If there is an increase in government spending, then which one of the following statements is…
  • UGC-NET 2026 · Q10If Investment-Saving (IS) curve is less elastic, then:
  • CUET-PG 2025 · Q56Which of the following statements are correct about the IS curve? (A) It shows the combination of the interest rate and the level of income such that the money market…

Question from the JNU SSS 2018 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.