Which of the following occurs as the economy moves leftward along a given IS curve?
A) An increase in the interest rate causes investment spending to decrease.
B) An increase in the interest rate causes money demand to increase.
C) An increase in the interest rate causes a reduction in the money supply.
D) A reduction in government spending causes a reduction in demand for goods.
E) An increase in taxes causes a reduction in demand for goods.
A
You might also like to view...
During periods of poor economic performance, real GDP
A) declines and unemployment declines. B) is unchanged but unemployment rises sharply. C) declines and unemployment rises. D) declines but unemployment typically does not change.
If the government places a new tax on the firing of workers, then we would expect
a. both the short run and long run Phillips curve to shift to the right. b. both the short run and long run Phillips curve to shift to the left. c. the long run Phillips curve remains unchanged while the short run Phillips curve shifts to the right. d. the short run Phillips curve remains unchanged while the long run Phillips curve shifts to the right. e. none of the above.