Events that shift the Ap demand schedule to the left also cause ________ the IS curve.
A)movements downward along
B)movements upward along
C)parallel rightward shifts of
D)parallel leftward shifts of

Question

Quizplus · Accepted Answer

A leftward shift in the AD demand schedule represents a decrease in aggregate demand. This decrease in aggregate demand leads to a decrease in real output and a decrease in the interest rate, causing the IS curve to shift leftward as well. Therefore, the correct answer is parallel leftward shifts of the IS curve.

Events That Shift the Ap Demand Schedule to the Left