Any change that reduces desired saving relative to desired investment (for a given level of output) causes the real interest rate to ________ and shifts the IS curve ________.
A) increase; down and to the left
B) increase; up and to the right
C) decrease; down and to the left
D) decrease; up and to the right
Correct Answer:
Verified
Q7: A decrease in the effective tax rate
Q8: A decline in expected future output would
Q9: A beneficial supply shock would cause the
Q10: Which of the following would shift the
Q11: An increase in investment spending would cause
Q13: Describe what happens to the FE line
Q14: Which of the following would shift the
Q15: The FE line
A)is horizontal.
B)is vertical.
C)slopes downward.
D)slopes upward.
Q16: The IS curve
A)is horizontal.
B)is vertical.
C)slopes downward.
D)slopes upward.
Q17: The FE line is vertical because the
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