If investment has a low sensitivity to the interest rate, the IS curve is rather __________, so that monetary policy has a __________ effect on GDP.

Name: If investment has a low sensitivity to the interest rate, the IS curve is rather __________, so that monetary policy has a __________ effect on GDP.
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Question

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When investment is less sensitive to interest rates, the IS curve is steep, meaning changes in interest rates have a smaller effect on investment and thus on GDP, making monetary policy less effective.

If Investment Has a Low Sensitivity to the Interest Rate