The IS curve shows the combinations of output and the real interest rate for which
A) the goods market is in equilibrium.
B) the labor market is in equilibrium.
C) the financial asset market is in equilibrium.
D) an increase in output will cause the market-clearing interest rate to be bid up.
A
Economics
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What will be an ideal response?
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Other things equal, a decrease in the price level ________ the equilibrium interest rate and ________ equilibrium output.
A. decreases; decreases B. increases; decreases C. decreases; increases D. increases; increases
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What will be an ideal response?
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