Any increase in autonomous spending will

Question

Quizplus · Accepted Answer

Any increase in autonomous spending, such as an increase in government spending or investment, will shift the IS curve to the right as it leads to an increase in output and income at every interest rate level. Therefore, option B is the correct choice. Option A is incorrect because a shift to the left would indicate a decrease in output and income, which is contradictory to an increase in autonomous spending. Options C and D are incorrect because any movement up or down along an IS curve is caused by changes in the interest rate, not autonomous spending.

Any Increase in Autonomous Spending Will