The IS Curve Will Not Shift When Which of the Following

question 2

Multiple Choice

The IS curve will not shift when which of the following occurs?

• A) A decrease in government spending.
• B) A decrease in firm confidence.
• C) A decrease in consumer confidence.
• D) A decrease in taxes.
• E) A decrease in the interest rate.

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Definitions:

WACC

Calculating the Weighted Average Cost of Capital involves determining a business's capital costs by giving proportional weights to different capital sources.

Cash Flows

The sum of funds flowing in and out of a company, particularly influencing its liquid assets.

IRR

Internal Rate of Return, the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

Mutually Exclusive

Situations or choices where the acceptance or selection of one necessarily excludes the other(s).