The IS curve ________
A) shows the relationship between aggregate output and the real interest rate when the goods market is in equilibrium
B) tells us that increases in autonomous consumption, investment, government purchases, or net exports raise output for any real interest rate
C) tells us that a decrease in taxes or in financial frictions leads to an increase in output for any given real interest rate
D) all of the above
E) none of the above
D
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"To calculate GDP, economists begin with total income earned and then subtract total expenditure by the four sectors of the economy." Is the previous sentence true or false? Explain your answer
What will be an ideal response?
Because ________ are less liquid for the depositor than ________, they earn higher interest rates
A) money market deposit accounts; time deposits B) checkable deposits; savings accounts C) savings accounts; checkable deposits D) savings accounts; time deposits