The IS curve will NOT shift when which of the following occurs?

Question

Quizplus · Accepted Answer

The IS curve represents the relationship between interest rates and output (or GDP) in the short run. Therefore, a change in government spending or consumer confidence would shift the IS curve, as it would change the level of output that is consistent with a given interest rate. However, a reduction in the interest rate itself would not shift the IS curve, as it would change the point on the existing IS curve where output and interest rates intersect.

The IS Curve Will NOT Shift When Which of the Following