The IS Curve Would Unambiguously Shift Up If There Were

question 92

Multiple Choice

The IS curve would unambiguously shift up if there were

• A)an increase in both government purchases and corporate taxes.
• B)an increase in both government purchases and the expected future marginal product of capital.
• C)an increase in the expected future marginal product of capital and a decrease in expected future output.
• D)a decrease in both corporate taxes and the expected future marginal product of capital.

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Definitions:

Negotiation

The process by which parties discuss their differences, with the aim of reaching an agreement or improving understanding.

Assignment

The passing of property or rights from one individual to another.

Indorsement

The act of signing one's name on the back of a cheque or other negotiable instrument to make it payable to someone else.

Without Recourse

A term indicating that the holder of a financial instrument, such as a note or bill, cannot demand payment from the original issuer in case of default by the borrower.