Which one of the following shifts the IS curve?
A)an increase in the money supply
B)an increase in the real interest rate
C)an expansionary monetary policy
D)a temporary increase in government purchases

Question

Quizplus · Accepted Answer

A temporary increase in government purchases would cause an increase in aggregate demand, shifting the IS curve to the right. An increase in the money supply would also shift the IS curve to the right, but this is not one of the options given. An increase in the real interest rate and an expansionary monetary policy would both shift the LM curve, not the IS curve.

Which One of the Following Shifts the IS Curve