Along an IS curve all of the following are always true except:
A) planned expenditures equal actual expenditures.
B) planned expenditures equal income.
C) the demand for real balances equals the supply of real balances.
D) there are no unplanned changes in inventories.

Question

Quizplus · Accepted Answer

The IS curve represents equilibrium in the goods market, where planned expenditures equal actual expenditures (A), planned expenditures equal income (B), and there are no unplanned changes in inventories (D). The demand for real balances equaling the supply of real balances (C) pertains to the money market, not the goods market, and is associated with the LM curve, not the IS curve.

Along an IS Curve All of the Following Are Always