The IS curve will shift down and to the left when
A) desired saving declines.
B) government purchases increase.
C) consumption increases.
D) the expected future marginal product of capital declines.
D
Economics
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The less interest-sensitive is money demand, the
A) more effective is fiscal policy relative to monetary policy. B) more effective is monetary policy relative to fiscal policy. C) steeper is the IS curve. D) flatter is the LM curve.
Economics
Given a central bank's monetary policy reaction curve, if inflation increases by 1% why would policymakers likely have to increase the nominal interest rate by more than the increase in the expected rate of inflation?
What will be an ideal response?
Economics