The Main Reason for the IS Curve Having a Downward

question 87

Multiple Choice

The main reason for the IS curve having a downward slope is

• A)higher output raises saving,which leads to a lower market-clearing interest rate.
• B)higher output raises saving,which leads to a higher market-clearing interest rate.
• C)higher output decreases saving,which leads to a lower market-clearing interest rate.
• D)higher output decreases saving,which leads to a higher market-clearing interest rate.

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Definitions:

Pure Nondiscriminating Monopolist

A monopolist who charges all consumers the same price for a good or service, regardless of the quantity purchased or consumer preferences.

Pure Competitor

A firm in a purely competitive market that sells products identical to those of other firms, making it a price taker with no control over market price.

Pure Monopoly

A market structure where a single seller controls the entire supply of a product or service, with no close substitutes, leading to significant market power.

Profit-Maximizing Price

The price at which a company can sell its product or service to achieve the highest possible profit.