The economy’s IS curve has a downward slope because
a) when output is too high, firms cut investment to reduce inventory
b) as income rises, consumption rises and saving falls
c) as interest rates rise, investment decreases
d) as uncertainty increases, saving rises and consumption falls
e) as government purchases rise, interest rates fall
c) as interest rates rise, investment decreases
You might also like to view...
Change in the price of a good causes the demand schedule for that good to shift.
Answer the following statement true (T) or false (F)
A firm will expand the amount of output it produces as long as its
A) average total revenue exceeds its average total cost. B) average total revenue exceeds its average variable cost. C) marginal cost exceeds its marginal revenue. D) marginal revenue exceeds its marginal cost.
The marginal cost of pollution abatement is represented by
A) an upward sloping curve. B) a downward sloping curve. C) a horizontal curve. D) a vertical curve.
Upward shifts are a. increases in both demand and supply
b. decreases in both demand and supply. c. increases in demand and decreases in supply. d. increases in supply and decreases in demand.