The IS curve slopes upward because
a. as income rises, savings rise and consumption falls, decreasing output.
b. as interest rates rise, the money supply rises, increasing output.
c. as interest rates rise, planned investment must fall, increasing output.
d. as income increases, money demand rises, which increases interest rates.
A
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The real business cycle school of thought is generally viewed as controversial because
A) it blames unemployment on immigration. B) it contradicts classical economic thought. C) critics find it difficult to understand how many of the post-World War II recessions could be explained by adverse changes in technology. D) all of the above.
What does it mean to say that workers and firms have rational expectations?
What will be an ideal response?
Define devaluation and use a figure to show the effect of a currency devaluation on the economy
What will be an ideal response?
Total surplus = Value to buyers - Costs to sellers
a. True b. False Indicate whether the statement is true or false