A shift to the left by the IS curve can be achieved by all of the following, EXCEPT a(n):
A) decrease in government spending.
B) increase in taxes.
C) increase in the foreign interest rate.
D) increase in the domestic price level.

Question

Quizplus · Accepted Answer

An increase in the foreign interest rate would not directly cause a leftward shift of the IS curve; it might affect the exchange rate or capital flows but not the IS curve directly.

A Shift to the Left by the IS Curve Can