In the IS model,assuming that the real interest rate does not change,an increase in ________ leads to an increase in equilibrium saving by households.
A)autonomous investment
B)government purchases
C)autonomous net exports
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

In the IS model, an increase in autonomous investment, government purchases, or autonomous net exports, assuming the real interest rate does not change, leads to an increase in income. This increase in income, in turn, leads to an increase in saving by households, as part of the additional income is saved.

In the IS Model,assuming That the Real Interest Rate Does