Which of the following would NOT cause a shift in the IS curve?
A)An increase in the domestic real interest rate
B)An increase in consumer confidence
C)A decrease in the expected future profitability of capital
D)A decrease in government purchases

Question

Quizplus · Accepted Answer

An increase in the domestic real interest rate would cause a movement along the IS curve but would not shift it. Shifts in the IS curve are caused by changes in exogenous variables such as changes in consumer confidence, expected future profitability of capital, and government purchases.

Which of the Following Would NOT Cause a Shift in the IS