Economics · Macroeconomics
Consider the following statements about the IS curve: 1. The IS curve slopes downward because higher interest rates reduce investment and aggregate demand, thereby lowering equilibrium income. 2. The IS curve will be steeper when the Keynesian multiplier is higher. 3. A rise in autonomous government expenditure shifts the IS curve rightward by the full multiplier amount. Which of the above statements are correct?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 11, 2 and 3
- 22 and 3 only
- 31 only
- 41 and 3 only✓
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1 and 3 only
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