Macroeconomics, 5ce

Chapter 5: Goods and Financial Markets: The IS-LM Model

TEST BANK FOR MACROECONOMICS CANADIAN 5TH

EDITION BLANCHARD JOHNSON 0132164361
9780132164368

Download full test bank at:

https://testbankpack.com/p/test-bank-for-macroeconomics-canadian-5th-
edition-blanchard-johnson-0132164361-9780132164368/

Download full solution manual at:

https://testbankpack.com/p/solution-manual-for-macroeconomics-canadian-5th-
edition-blanchard-johnson-0132164361-9780132164368/

Chapter 5 Goods and Financial Markets: The IS-LM Model

1) The IS represents:
A) the single level of output where financial markets are in equilibrium.
B) the combinations of output and the interest rate where the money market is in equilibrium.
C) the combinations of output and the interest rate where the goods market is in equilibrium.
D) the single level of output where the goods market is in equilibrium.
E) the single level of output where both the goods market and the money market are in
equilibrium.
Answer: C
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 5-1

2) The IS curve will shift to the left when which of the following occurs?
A) a reduction in taxes
B) an increase in interest rates
C) an increase in consumer confidence
D) an increase in taxes
E) an increase in government spending
Answer: D
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 5-1

3) Which of the following occurs as the economy moves rightward along the IS curve?
A) A reduction in the interest rate causes investment spending to increase.
Copyright © 2015 Pearson Canada Inc. 5-1
 Macroeconomics, 5ce
Chapter 5: Goods and Financial Markets: The IS-LM Model

B) An increase in taxes causes a reduction in demand for goods.

C) A reduction in the interest rate causes an increase in the money supply.
D) An increase in government spending causes an increase in demand for goods.
E) A reduction in the interest rate causes money demand to increase.
Answer: A
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 5-1

Copyright © 2015 Pearson Canada Inc. 5-2

 Macroeconomics, 5ce
Chapter 5: Goods and Financial Markets: The IS-LM Model

4) The LM represents:
A) the single level of output where financial markets are in equilibrium.
B) the combinations of output and the interest rate where the money market is in equilibrium.
C) the combinations of output and the interest rate where the goods market is in equilibrium.
D) the single level of output where the goods market is in equilibrium.
E) the single level of output where both the goods market and the money market are in
equilibrium.
Answer: B
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 5-2

5) The LM curve will shift when which of the following occurs?

A) an increase in output
B) an open market sale of bonds
C) a reduction in taxes
D) an increase in government spending
E) a reduction in government spending
Answer: B
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 5-2

6) Which of the following occurs as the economy moves rightward along the LM curve?
A) An increase in output causes an increase in money demand.
B) A reduction in the interest rate causes an increase in the money supply.
C) An increase in output causes an increase in demand for goods.
D) A reduction in the interest rate causes money demand to increase.
E) A reduction in the interest rate causes investment spending to increase.
Answer: A
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 5-2

7) Suppose the economy is currently operating on both the LM curve and the IS curve. Given
this information, we know that:
A) only the goods market is in equilibrium.
B) only the money market is in equilibrium.
C) the bond market and financial markets are in equilibrium.
D) the goods market and the money market are in equilibrium.
E) the bond market and money market are in equilibrium.
Answer: D
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 5-3

Copyright © 2015 Pearson Canada Inc. 5-3

 Macroeconomics, 5ce
Chapter 5: Goods and Financial Markets: The IS-LM Model

8) Suppose the economy is operating on the LM curve but not on the IS curve. Given this
information, we know that:
A) the money, bond and goods markets are all in equilibrium.
B) neither the money, bond, nor goods markets are in equilibrium.
C) the money market and bond markets are in equilibrium and the goods market is not in
equilibrium.
D) the goods market is in equilibrium and the money market is not in equilibrium.
E) the money market and goods market are in equilibrium but the bond market is not in
equilibrium.
Answer: C
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 5-3

9) Suppose the economy is operating on neither the IS nor LM curve. Given this information, we
know that:
A) the goods market is in equilibrium.
B) the bond market is in equilibrium.
C) the money market is in equilibrium, but the goods market not is in equilibrium.
D) financial markets are in equilibrium, but the money market not is in equilibrium.
E) the goods market and the money market are not in equilibrium.
Answer: E
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 5-3

10) A reduction in government spending will cause:

A) the IS curve to shift leftward.
B) the LM curve to shift down.
C) the IS curve to shift rightward.
D) the LM curve to shift up.
E) the IS curve to shift rightward, and the LM curve to shift up.
Answer: A
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 5-1

11) After a contractionary fiscal policy:

A) the IS curve shifts and we move along the LM curve.
B) both the IS and LM curves shift.
C) neither the IS nor the LM curve shifts.
D) the LM curve shifts and we move along the IS curve.
E) output will change causing a change in money demand and a shift of the LM curve.
Answer: A
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 5-1

Copyright © 2015 Pearson Canada Inc. 5-4

 Macroeconomics, 5ce
Chapter 5: Goods and Financial Markets: The IS-LM Model

12) An open market purchase of bonds will cause which of the following to occur?
A) The IS curve shifts rightward as the interest rate falls.
B) The LM curve shifts up.
C) The IS curve shifts leftward as the interest rate increases.
D) The LM curve shifts down.
E) The IS curve shifts rightward and the LM curve to remain the same.
Answer: D
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 5-2

13) Based on our understanding of the IS-LM model, we know that a tax cut:
A) increases money demand and the interest rate.
B) must cause investment spending to increase.
C) could never affect investment spending.
D) must cause investment spending to decrease.
E) will reduce consumption and income.
Answer: A
Diff: 1 Type: MC
Skill: Applied
Section Ref.: 5-3

14) Suppose investment spending depends only on the interest rate and no longer depends on
output. Given this information, a reduction in government spending:
A) will cause investment to decrease.
B) will cause a reduction in output and have no effect on the interest rate.
C) will cause investment to increase.
D) will have no effect on investment.
E) will have no effect on output.
Answer: C
Diff: 2 Type: MC
Skill: Recall
Section Ref.: 5-1

15) If investment spending is very sensitive to the interest rate, then:

A) the IS curve should be relatively steep.
B) neither the IS nor the LM curve will be affected.
C) the IS curve should be relatively flat.
D) the LM curve should be relatively steep.
E) the LM curve should be relatively flat.
Answer: C
Diff: 2 Type: MC
Skill: Recall
Section Ref.: 5-1

Copyright © 2015 Pearson Canada Inc. 5-5

 Macroeconomics, 5ce
Chapter 5: Goods and Financial Markets: The IS-LM Model

16) If the demand for money is very sensitive to the interest rate, then:
A) the LM curve should be relatively steep.
B) the IS curve should be relatively flat.
C) the IS curve should be relatively steep.
D) the LM curve should be relatively flat.
E) neither the IS nor the LM curve will be affected.
Answer: D
Diff: 2 Type: MC
Skill: Recall
Section Ref.: 5-2

17) The "real money supply" is:

A) the money supply after subtracting counterfeit bills.
B) the stock of money measured in terms of goods, not dollars.
C) the actual quantity of money, rather than the officially reported quantity.
D) currency in circulation only.
E) the stock of high powered money only.
Answer: B
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 5-2

18) An increase in the money supply will cause:

A) an increase in interest rate.
B) an increase in government spending.
C) an increase in taxes.
D) an increase in investment.
E) a reduction in government spending.
Answer: D
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 5-2

19) Suppose there is a tax cut. Which of the following represents the complete list of variables
that must increase in response to this tax cut?
A) consumption and investment
B) consumption
C) consumption and output
D) consumption, investment and output
E) consumption, output and the interest rate
Answer: E
Diff: 1 Type: MC
Skill: Applied
Section Ref.: 5-1

Copyright © 2015 Pearson Canada Inc. 5-6

 Macroeconomics, 5ce
Chapter 5: Goods and Financial Markets: The IS-LM Model

20) Suppose there is a monetary contraction. Which of the following is a complete list of the
variables that must decrease?
A) consumption, output and investment
B) consumption and output
C) consumption
D) consumption and investment
E) consumption, output and the interest rate
Answer: A
Diff: 1 Type: MC
Skill: Applied
Section Ref.: 5-2

21) Suppose there is a simultaneous tax cut and open market sale of bonds. Which of the
following must occur as a result of this?
A) The interest rate increases.
B) Both output and the interest rate increase.
C) The interest rate decreases.
D) Output increases.
E) Output decreases.
Answer: A
Diff: 2 Type: MC
Skill: Applied
Section Ref.: 5-3

22) Suppose there is a simultaneous tax cut and open market purchase of bonds. Which of the
following must occur as a result of this?
A) The interest rate increases.
B) The interest rate decreases.
C) Output decreases.
D) Output increases.
E) Both output and the interest rate increase.
Answer: D
Diff: 2 Type: MC
Skill: Applied
Section Ref.: 5-3

23) Which of the following describes the Martin-Theissen policy mix in Canada?
A) expansionary fiscal, expansionary monetary
B) contractionary fiscal, expansionary monetary
C) contractionary fiscal, contractionary monetary
D) expansionary fiscal, contractionary monetary
E) balanced budget fiscal, contractionary monetary
Answer: B
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 5-4

Copyright © 2015 Pearson Canada Inc. 5-7

 Macroeconomics, 5ce
Chapter 5: Goods and Financial Markets: The IS-LM Model

24) A reasonable dynamic assumption for the IS-LM model is that:

A) the economy is always on both the IS and LM curves.
B) the economy is always on the IS curve, but moves only slowly to the LM curve.
C) adjustment to the new IS-LM equilibrium is instantaneous after an LM shift, but not after an
IS shift.
D) the economy is always on the LM curve, but moves only slowly to the IS curve.
E) the money market is quick to adjust, but the bond market adjusts more slowly.
Answer: D
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 5-4

25) If the central bank directly targets the interest rate in response to an increase in income, the
central bank will:
A) keep the money supply constant.
B) reduce the money supply.
C) increase the money supply.
D) reduce the target interest rate.
E) increase the target interest rate
Answer: C
Diff: 2 Type: MC
Skill: Recall
Section Ref.: 5-6

26) Suppose there is a policy mix of expansionary monetary policy and expansionary fiscal
policy. This combination of policies must cause:
A) an increase in output (Y).
B) a reduction in i.
C) a reduction in Y.
D) an increase in the interest rate (i).
E) an increase in investment (I).
Answer: A
Diff: 2 Type: MC
Skill: Applied
Section Ref.: 5-4

27) Suppose there is a policy mix of contractionary monetary policy and expansionary fiscal
policy. This combination of policies must cause:
A) an increase in output (Y).
B) an increase in the interest rate (i).
C) a reduction in i.
D) a reduction in Y.
E) an increase in consumption.
Answer: B
Diff: 2 Type: MC
Skill: Applied
Section Ref.: 5-4

Copyright © 2015 Pearson Canada Inc. 5-8

 Macroeconomics, 5ce
Chapter 5: Goods and Financial Markets: The IS-LM Model

28) Suppose there is a policy mix of expansionary monetary policy and contractionary fiscal
policy. This combination of policies must cause:
A) an increase in the interest rate (i).
B) a reduction in Y.
C) an increase in output (Y).
D) a reduction in i.
E) an increase in consumption.
Answer: D
Diff: 2 Type: MC
Skill: Applied
Section Ref.: 5-4

29) Suppose there is a policy mix of contractionary monetary policy and contractionary fiscal
policy. This combination of policies must cause:
A) an increase in investment (I).
B) an increase in output (Y).
C) an increase in the interest rate (i).
D) a reduction in i.
E) a reduction in Y.
Answer: E
Diff: 2 Type: MC
Skill: Applied
Section Ref.: 5-4

30) A tax cut must cause which of the following?

A) no change in investment
B) an increase in government spending
C) an increase in investment
D) an increase in consumption
E) a reduction in government spending
Answer: D
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 5-1

31) A tax cut must cause which of the following?

A) no change in output if the central bank simultaneously pursues expansionary monetary policy
B) an increase in the interest rate and a reduction in investment
C) an increase in the interest rate and an ambiguous effect on investment
D) an increase in the interest rate and an increase in investment
E) an increase in the interest rate and an upward shift in the LM curve
Answer: C
Diff: 2 Type: MC
Skill: Recall
Section Ref.: 5-1

Copyright © 2015 Pearson Canada Inc. 5-9

 Macroeconomics, 5ce
Chapter 5: Goods and Financial Markets: The IS-LM Model

32) An increase in the money supply must cause which of the following?
A) an increase in investment and a rightward shift in the IS curve
B) a leftward shift in the IS curve
C) no change in output if investment is independent of the interest rate
D) a reduction in the interest rate and ambiguous effects on investment
E) no change in the interest rate if investment is independent of the interest rate
Answer: C
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 5-2

33) A reduction in government spending will cause:

A) a downward shift in the LM curve.
B) a rightward shift in the IS curve.
C) an upward shift in the LM curve.
D) a leftward shift in the IS curve.
E) the IS and LM to remain the same.
Answer: D
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 5-3

34) Assume that investment does NOT depend on the interest rate. A reduction in government
spending will cause which of the following for this economy?
A) no change in output
B) a reduction in output
C) no change in investment
D) an increase in investment
E) no change in the interest rate
Answer: B
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 5-1

35) Assume that investment does NOT depend on the interest rate. A reduction in the money
supply will cause which of the following for this economy?
A) no change in the interest rate
B) a reduction in investment
C) an increase in investment
D) no change in output
E) an increase in output
Answer: D
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 5-2

Copyright © 2015 Pearson Canada Inc. 5-10

 Macroeconomics, 5ce
Chapter 5: Goods and Financial Markets: The IS-LM Model

36) A reduction in consumer confidence will likely have which of the following effects?
A) a leftward shift in the IS curve
B) no change in the IS curve
C) a rightward shift in the IS curve
D) an upward shift in the LM curve
E) a downward shift in the LM curve
Answer: A
Diff: 2 Type: MC
Skill: Applied
Section Ref.: 5-3

37) An increase in the reserve deposit ratio, θ, will most likely have which of the following
effects?
A) a rightward shift in the IS curve
B) an upward shift in the LM curve
C) a downward shift in the LM curve
D) a leftward shift in the IS curve
E) no change in the LM curve
Answer: B
Diff: 2 Type: MC
Skill: Applied
Section Ref.: 5-3

38) A Bank of Canada purchase of securities will most likely have which of the following
effects?
A) a leftward shift in the IS curve
B) a downward shift in the LM curve
C) an upward shift in the LM curve
D) a rightward shift in the IS curve
E) no change in the LM curve
Answer: B
Diff: 2 Type: MC
Skill: Applied
Section Ref.: 5-2

39) An increase in government spending when there is an interest rate target leads to:
A) a decrease in output, an increase in the money supply, and no change in the interest rate.
B) an increase in output, the money supply, or the interest rate.
C) an increase in output, an increase in the money supply, and no change in the interest rate.
D) an increase in output, a decrease in the money supply, and a decrease in the interest rate.
E) no change in output, the money supply, or the interest rate.
Answer: C
Diff: 2 Type: MC
Skill: Applied
Section Ref.: 5-6

Copyright © 2015 Pearson Canada Inc. 5-11

 Macroeconomics, 5ce
Chapter 5: Goods and Financial Markets: The IS-LM Model

40) An increase in the aggregate price level, P, will most likely have which of the following
effects?
A) a rightward shift in the IS curve
B) no change in the LM curve
C) a downward shift in the LM curve
D) a leftward shift in the IS curve
E) an upward shift in the LM curve
Answer: E
Diff: 2 Type: MC
Skill: Applied
Section Ref.: 5-2

41) The IS curve will NOT shift when which of the following occurs?
A) a reduction in consumer confidence
B) a reduction in the interest rate
C) a reduction in government spending
D) an increase in government spending
E) an increase in consumer confidence
Answer: B
Diff: 2 Type: MC
Skill: Applied
Section Ref.: 5-1

42) Which of the following best defines the IS curve?

A) illustrates the effects of changes in i on investment
B) the combinations of i and Y that maintain equilibrium in financial markets
C) illustrates the effects of changes in i on desired money holdings by individuals
D) the combinations of i and Y that maintain equilibrium in the goods market
E) the combinations of i and Y that maintain equilibrium in both the goods market and financial
markets
Answer: D
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 5-1

43) Which of the following best defines the LM curve?

A) illustrates the effects of changes in i on desired money holdings by individuals
B) the combinations of i and Y that maintain equilibrium in the goods market
C) the combinations of i and Y that maintain equilibrium in financial markets
D) illustrates the effects of changes in i on investment
E) the combinations of i and Y that maintain equilibrium in both the goods market and financial
markets
Answer: C
Diff: 1 Type: MC
Skill: Recall
Section Ref.: 5-2

Copyright © 2015 Pearson Canada Inc. 5-12

 Macroeconomics, 5ce
Chapter 5: Goods and Financial Markets: The IS-LM Model

44) Based on our understanding of the IS-LM model that takes into account dynamics, we know
that a reduction in the money supply will cause:
A) an immediate increase in i and no initial change in Y.
B) an immediate drop in Y and immediate increase in i.
C) a gradual increase in i and gradual reduction in Y.
D) an immediate reduction in i and no initial change in Y.
E) a gradual reduction in i and gradual reduction in Y.
Answer: A
Diff: 2 Type: MC
Skill: Recall
Section Ref.: 5-4

45) Based on our understanding of the IS-LM model that takes into account dynamics, we know
that a reduction in government spending will cause:
A) a gradual increase in i and gradual reduction in Y.
B) an immediate reduction in i and no initial change in Y.
C) a gradual reduction in i and an immediate reduction in Y.
D) an immediate drop in Y and immediate increase in i.
E) a gradual reduction in i and gradual reduction in Y.
Answer: E
Diff: 2 Type: MC
Skill: Recall
Section Ref.: 5-4

Suppose that the following equations describe an economy:

C = 170 + 0.60YD MS = 735; P = 1 T = 200

I = 100 - 4i Md = 0.75Y - 6i G = 350

46) The equation for equilibrium in the goods market is:

A) Y = 1250 + 10i.
B) Y = 980 + 8i.
C) Y = 980 - 8i.
D) Y = 1250 - 10i.
E) Y = 1250 + 8i.
Answer: D
Diff: 2 Type: MC
Skill: Applied
Section Ref.: 5-3

Copyright © 2015 Pearson Canada Inc. 5-13

 Macroeconomics, 5ce
Chapter 5: Goods and Financial Markets: The IS-LM Model

47) The equation for equilibrium in the financial markets:

A) Y = 1250 + 10i.
B) Y = 980 + 8i.
C) Y = 980 - 8i.
D) Y = 1250 - 10i.
E) Y = 1250 + 8i.
Answer: B
Diff: 2 Type: MC
Skill: Applied
Section Ref.: 5-3

48) The equilibrium level of output (Y), the interest rate (i), investment (I) and consumption (C)
are, respectively:
A) Y = 1200; i = 15; I = 40; C = 710.
B) Y = 1100; i = 5; I = 40; C = 700.
C) Y = 1100; i = 15; I = 40; C = 710.
D) Y = 1200; i = 15; I = 20; C = 710.
E) Y = 1000; i = 10; I = 40; C = 600.
Answer: C
Diff: 2 Type: MC
Skill: Applied
Section Ref.: 5-3

49) Suppose that the Bank of Canada sought to achieve the equilibrium level of output Y = 1140
through expansionary monetary policy alone. By how much would the Bank of Canada have to
increase the money supply?
A) 23
B) 72
C) 44
D) 38
E) 54
Answer: E
Diff: 3 Type: MC
Skill: Applied
Section Ref.: 5-3

50) Suppose that G increases by 36 to 386. The new IS curve is given by:
A) Y = 1340 - 8i.
B) Y = 1340 - 10i.
C) Y = 1340 + 10i.
D) Y = 1250 - 10i.
E) Y = 1250 + 8i.
Answer: B
Diff: 3 Type: MC
Skill: Applied
Section Ref.: 5-3

Copyright © 2015 Pearson Canada Inc. 5-14

Another random document with
no related content on Scribd:
 License. You must require such a user to return or destroy all
copies of the works possessed in a physical medium and
discontinue all use of and all access to other copies of Project
Gutenberg™ works.

• You provide, in accordance with paragraph 1.F.3, a full refund of

any money paid for a work or a replacement copy, if a defect in
the electronic work is discovered and reported to you within 90
days of receipt of the work.

• You comply with all other terms of this agreement for free
distribution of Project Gutenberg™ works.

1.E.9. If you wish to charge a fee or distribute a Project Gutenberg™

electronic work or group of works on different terms than are set
forth in this agreement, you must obtain permission in writing from
the Project Gutenberg Literary Archive Foundation, the manager of
the Project Gutenberg™ trademark. Contact the Foundation as set
forth in Section 3 below.

1.F.

1.F.1. Project Gutenberg volunteers and employees expend

considerable effort to identify, do copyright research on, transcribe
and proofread works not protected by U.S. copyright law in creating
the Project Gutenberg™ collection. Despite these efforts, Project
Gutenberg™ electronic works, and the medium on which they may
be stored, may contain “Defects,” such as, but not limited to,
incomplete, inaccurate or corrupt data, transcription errors, a
copyright or other intellectual property infringement, a defective or
damaged disk or other medium, a computer virus, or computer
codes that damage or cannot be read by your equipment.

1.F.2. LIMITED WARRANTY, DISCLAIMER OF DAMAGES - Except

for the “Right of Replacement or Refund” described in paragraph
1.F.3, the Project Gutenberg Literary Archive Foundation, the owner
of the Project Gutenberg™ trademark, and any other party
distributing a Project Gutenberg™ electronic work under this
agreement, disclaim all liability to you for damages, costs and
expenses, including legal fees. YOU AGREE THAT YOU HAVE NO
REMEDIES FOR NEGLIGENCE, STRICT LIABILITY, BREACH OF
WARRANTY OR BREACH OF CONTRACT EXCEPT THOSE
PROVIDED IN PARAGRAPH 1.F.3. YOU AGREE THAT THE
FOUNDATION, THE TRADEMARK OWNER, AND ANY
DISTRIBUTOR UNDER THIS AGREEMENT WILL NOT BE LIABLE
TO YOU FOR ACTUAL, DIRECT, INDIRECT, CONSEQUENTIAL,
PUNITIVE OR INCIDENTAL DAMAGES EVEN IF YOU GIVE
NOTICE OF THE POSSIBILITY OF SUCH DAMAGE.

1.F.3. LIMITED RIGHT OF REPLACEMENT OR REFUND - If you

discover a defect in this electronic work within 90 days of receiving it,
you can receive a refund of the money (if any) you paid for it by
sending a written explanation to the person you received the work
from. If you received the work on a physical medium, you must
return the medium with your written explanation. The person or entity
that provided you with the defective work may elect to provide a
replacement copy in lieu of a refund. If you received the work
electronically, the person or entity providing it to you may choose to
give you a second opportunity to receive the work electronically in
lieu of a refund. If the second copy is also defective, you may
demand a refund in writing without further opportunities to fix the
problem.

1.F.4. Except for the limited right of replacement or refund set forth in
paragraph 1.F.3, this work is provided to you ‘AS-IS’, WITH NO
OTHER WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR ANY PURPOSE.

1.F.5. Some states do not allow disclaimers of certain implied

warranties or the exclusion or limitation of certain types of damages.
If any disclaimer or limitation set forth in this agreement violates the
law of the state applicable to this agreement, the agreement shall be
interpreted to make the maximum disclaimer or limitation permitted
by the applicable state law. The invalidity or unenforceability of any
provision of this agreement shall not void the remaining provisions.

1.F.6. INDEMNITY - You agree to indemnify and hold the

Foundation, the trademark owner, any agent or employee of the
Foundation, anyone providing copies of Project Gutenberg™
electronic works in accordance with this agreement, and any
volunteers associated with the production, promotion and distribution
of Project Gutenberg™ electronic works, harmless from all liability,
costs and expenses, including legal fees, that arise directly or
indirectly from any of the following which you do or cause to occur:
(a) distribution of this or any Project Gutenberg™ work, (b)
alteration, modification, or additions or deletions to any Project
Gutenberg™ work, and (c) any Defect you cause.

Section 2. Information about the Mission of

Project Gutenberg™
Project Gutenberg™ is synonymous with the free distribution of
electronic works in formats readable by the widest variety of
computers including obsolete, old, middle-aged and new computers.
It exists because of the efforts of hundreds of volunteers and
donations from people in all walks of life.

Volunteers and financial support to provide volunteers with the

assistance they need are critical to reaching Project Gutenberg™’s
goals and ensuring that the Project Gutenberg™ collection will
remain freely available for generations to come. In 2001, the Project
Gutenberg Literary Archive Foundation was created to provide a
secure and permanent future for Project Gutenberg™ and future
generations. To learn more about the Project Gutenberg Literary
Archive Foundation and how your efforts and donations can help,
see Sections 3 and 4 and the Foundation information page at
www.gutenberg.org.
 Section 3. Information about the Project
Gutenberg Literary Archive Foundation
The Project Gutenberg Literary Archive Foundation is a non-profit
501(c)(3) educational corporation organized under the laws of the
state of Mississippi and granted tax exempt status by the Internal
Revenue Service. The Foundation’s EIN or federal tax identification
number is 64-6221541. Contributions to the Project Gutenberg
Literary Archive Foundation are tax deductible to the full extent
permitted by U.S. federal laws and your state’s laws.

The Foundation’s business office is located at 809 North 1500 West,

Salt Lake City, UT 84116, (801) 596-1887. Email contact links and up
to date contact information can be found at the Foundation’s website
and official page at www.gutenberg.org/contact

Section 4. Information about Donations to

the Project Gutenberg Literary Archive
Foundation
Project Gutenberg™ depends upon and cannot survive without
widespread public support and donations to carry out its mission of
increasing the number of public domain and licensed works that can
be freely distributed in machine-readable form accessible by the
widest array of equipment including outdated equipment. Many small
donations ($1 to $5,000) are particularly important to maintaining tax
exempt status with the IRS.

The Foundation is committed to complying with the laws regulating

charities and charitable donations in all 50 states of the United
States. Compliance requirements are not uniform and it takes a
considerable effort, much paperwork and many fees to meet and
keep up with these requirements. We do not solicit donations in
locations where we have not received written confirmation of
compliance. To SEND DONATIONS or determine the status of
compliance for any particular state visit www.gutenberg.org/donate.

While we cannot and do not solicit contributions from states where

we have not met the solicitation requirements, we know of no
prohibition against accepting unsolicited donations from donors in
such states who approach us with offers to donate.

International donations are gratefully accepted, but we cannot make

any statements concerning tax treatment of donations received from
outside the United States. U.S. laws alone swamp our small staff.

Please check the Project Gutenberg web pages for current donation
methods and addresses. Donations are accepted in a number of
other ways including checks, online payments and credit card
donations. To donate, please visit: www.gutenberg.org/donate.

Section 5. General Information About Project

Gutenberg™ electronic works
Professor Michael S. Hart was the originator of the Project
Gutenberg™ concept of a library of electronic works that could be
freely shared with anyone. For forty years, he produced and
distributed Project Gutenberg™ eBooks with only a loose network of
volunteer support.

Project Gutenberg™ eBooks are often created from several printed

editions, all of which are confirmed as not protected by copyright in
the U.S. unless a copyright notice is included. Thus, we do not
necessarily keep eBooks in compliance with any particular paper
edition.

Most people start at our website which has the main PG search
facility: www.gutenberg.org.

This website includes information about Project Gutenberg™,

including how to make donations to the Project Gutenberg Literary
Archive Foundation, how to help produce our new eBooks, and how
to subscribe to our email newsletter to hear about new eBooks.