Which of the following will NOT cause a shift of the IS-curve?

Question

Quizplus · Accepted Answer

A change in money demand will cause a shift in the LM-curve, which may lead to a movement along the IS-curve but will not cause a shift in the IS-curve itself. All the other choices will cause a shift in the IS-curve. A decrease in transfer payments (A) or an increase in taxes (B) will decrease disposable income and reduce consumption spending, shifting the IS-curve leftward. An increase in business and consumer confidence (D) or an increase in autonomous saving (E) will increase investment and saving, respectively, shifting the IS-curve rightward.

Which of the Following Will NOT Cause a Shift of the IS-Curve