Economics · Macroeconomics
Which of the following statements are correct regarding the Investment-Saving (IS) curve? (A) It shows the combinations of interest rate and income level where the money market is in equilibrium. (B) It is negatively sloped. (C) The smaller the multiplier and the more sensitive investment spending is to changes in the interest rate, the steeper the IS curve. (D) An increase in government purchases shifts the IS curve to the right.
- 1(B) and (D) only✓
- 2(C) and (D) only
- 3(A), (B), and (C) only
- 4(A), (B), and (D) only
Correct answer
(B) and (D) only
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