Refer to the information provided in Figure 11.5 below to answer the questions that follow. Figure 11.5
-Refer to Figure 11.5. A decrease in government spending shifts the ________ to the ________.
A) IS curve; left
B) Fed rule; right
C) IS curve; right
D) Fed rule; left

Question

Refer to the information provided in Figure 11.5 below to answer the questions that follow.  Figure 11.5
-Refer to Figure 11.5. A decrease in government spending shifts the ________ to the ________.
A) IS curve; left 
B) Fed rule; right 
C) IS curve; right 
D) Fed rule; left

Quizplus · Accepted Answer

In Figure 11.5, a decrease in government spending would lead to a decrease in the level of output or GDP, which would shift the IS curve to the left. Therefore, the correct choice is A) IS curve; left.

Refer to the Information Provided in Figure 11