In the IS-MP analysis in the Fed model, a fall in the interest rate causes a:
A)right shift of the IS curve.
B)movement to the left along the IS curve.
C)left shift of the IS curve.
D)movement to the right along the IS curve.

Question

Quizplus · Accepted Answer

A fall in the interest rate causes an increase in investment, which leads to an increase in aggregate demand and a movement to the right along the IS curve.

In the IS-MP Analysis in the Fed Model, a Fall