Everything else held constant,if aggregate output is to the ________ of the IS curve,then there is an excess ________ of goods which will cause aggregate output to fall.
A)right;supply
B)right;demand
C)left;supply
D)left;demand

Question

Quizplus · Accepted Answer

When aggregate output is to the right of the IS curve, it means that at the current interest rate, the level of output (income) is higher than what the goods market can absorb, leading to an excess supply of goods. This imbalance will cause firms to reduce production, leading to a decrease in aggregate output.

Everything Else Held Constant,if Aggregate Output Is to the ________