Assume the economy is initially in equilibrium with real GDP equal to potential GDP
Other things equal, if the economy enters a recession and there are no automatic stabilizers, the IS curve would shift to the ________, and the shift would be equal to ________. A) right; decline in investment spending
B) left; decline in investment spending
C) right; decline in investment spending times the multiplier
D) left; decline in investment spending times the multiplier
D
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Which of the following pairs of goods is the best example of substitute goods?
a. Borden's milk and Nabisco cookies b. Goodyear tires and Ford automobiles c. Exxon gasoline and Ford automobiles d. McDonald's Big Mac and Wendy's grilled chicken sandwich e. Dell computers and Microsoft software
Which of the following statements is true?
A) The main items that comprise indirect business taxes include excise taxes, income taxes, and property taxes. B) Capital consumption allowance is also known as depreciation. C) A sales tax is an example of an indirect business tax. D) b and c E) a, b, and c