A change in income in the IS-LM model for a fixed price
A) represents a shift in the aggregate demand curve.
B) represents a movement along the aggregate demand curve.
C) has the same effect on the aggregate demand curve as a change in income in the IS-LM model resulting from a change in the price level.
D) does not represent a change in the aggregate demand curve.

Question

Quizplus · Accepted Answer

A change in income in the IS-LM model for a fixed price represents a shift in the aggregate demand curve. This is because the IS-LM model shows the relationship between income and interest rates, and any change in income will lead to a shift in the aggregate demand curve. A movement along the aggregate demand curve would occur with a change in the price level.

A Change in Income in the IS-LM Model for a Fixed