An increase in the interest rate will cause reduction in investment, aggregate demand, and equilibrium output. Thus,

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"An increase in the interest rate will cause reduction in investment, aggregate demand, and equilibrium output. Thus, an increase in the interest rate will cause a leftward shift in the IS curve"

Is this statement true, false or uncertain? Explain.

Related Book For answer-question

Money, Banking, and the Financial System

ISBN: 978-0134524061

3rd edition

Authors: R. Glenn Hubbard, Anthony Patrick O'Brien

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Posted Date: Mar 13, 2019 09:57 AM

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An increase in the interest rate will cause reduction in investment, aggregate demand, and equilibrium output. Thus,

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Expert Answer:

The given statement is false because the IS curve shows the combination o... View the full answer

Money, Banking, and the Financial System

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