An Increase in the Spending Multiplier Causes the IS Curve

question 46

Multiple Choice

An increase in the spending multiplier causes the IS curve to:

• A)become steeper.
• B)become flatter.
• C)shift temporarily to having a positive slope.
• D)shift to the left.

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Definitions:

Pure Monopolist

A market participant who exclusively controls the supply of a particular good or service, without competition or substitute products.

ATC

Average Total Cost, which represents the per-unit cost of production, including both fixed and variable costs.

Economic Profit

Profit calculated by subtracting both explicit and implicit costs from total revenue, reflecting the true economic performance of a company.

Profit-Maximizing

Achieving the highest possible profit through the management of resources, production outputs, and pricing strategies, within the constraints of market conditions.