The IS curve shifts when all of the following economic variables change except:
A) the interest rate.
B) government spending.
C) tax rates.
D) the marginal propensity to consume.

Question

Quizplus · Accepted Answer

The IS curve represents the relationship between the interest rate and the level of income that equates the goods market. It shifts due to changes in factors like government spending, tax rates, and the marginal propensity to consume, but not due to changes in the interest rate itself, which causes movement along the curve.

The IS Curve Shifts When All of the Following Economic