The slope of the IS curve depends on each of the following except
A) the propensity to import.
B) the tax rate.
C) the interest rate-sensitivity of investment spending.
D) foreign real interest rates.

Question

Quizplus · Accepted Answer

The slope of the IS curve is determined by factors that affect investment and saving in the domestic economy, such as the propensity to import, the tax rate, and the interest rate sensitivity of investment spending. Foreign real interest rates, however, do not directly affect the slope of the IS curve, as it primarily reflects domestic economic conditions.

The Slope of the IS Curve Depends on Each of the Following