The IS curve illustrates all combinations of domestic output levels and interest rates for which:
A)the domestic product market is in equilibrium.
B)the domestic money market is in equilibrium.
C)there is a zero balance in the country's official settlements balance.
D)there is full employment.

Question

Quizplus · Accepted Answer

The IS curve represents all combinations of interest rates and output levels where the goods market is in equilibrium, meaning that investment equals savings at those points.

The IS Curve Illustrates All Combinations of Domestic Output Levels