If Investment Becomes More Responsive to Changes in the Interest

question 47

Multiple Choice

If investment becomes more responsive to changes in the interest rate, then

• A)the size of the government spending multiplier will increase
• B)a given increase in the interest rate will lead to a larger increase in income
• C)the IS-curve will become flatter
• D)the IS-curve will become steeper
• E)both A and C

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