Figure 13.2
-Refer to Figure 13.2.Starting from an equilibrium point A,which of the following factors would cause the IS curve to shift to the left.
A) A tax cut
B) A decrease in money supply
C) An increase in money supply
D) A decrease in government spending

Question

Figure 13.2 
-Refer to Figure 13.2.Starting from an equilibrium point A,which of the following factors would cause the IS curve to shift to the left.
A) A tax cut 
B) A decrease in money supply 
C) An increase in money supply 
D) A decrease in government spending

Quizplus · Accepted Answer

Decreasing government spending would cause a decrease in overall aggregate demand in the economy, shifting the IS curve to the left from point A. A tax cut or an increase in money supply would increase aggregate demand, shifting the IS curve to the right.

Figure 13.2 -Refer to Figure 13.2.Starting from an Equilibrium Point A,which of Point