i) What does the IS curve represents and why is negative slope?

ii) Under which circumstances the IS could become flatter.

iii) Because of an increase in consumer confidence, autonomous consumption has rise.

Will this shift the IS curve? In which direction? By how much?

iv) A drop interest rates will generate an increase in Investment, therefore y∗ will increase, thus the IS curve shift to the right. Is this statement true or false?

v) Why the LM curve now days is horizontal?

Answer rating: 100% (QA)

i The IS curve represents the relationship between the interest rate and output The interest rate is ... View the full answer