The IS curve ________.
A)shifts to the right when autonomous consumption increases
B)shifts up when the real interest rate increases
C)shifts to the left when autonomous investment increases
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

The IS curve shifts to the right when there is an increase in autonomous consumption because this leads to an increase in overall demand, which in turn increases income and output for a given level of interest rates.

The IS Curve ________