Any Change That Reduces Desired Saving Relative to Desired Investment

question 63

Multiple Choice

Any change that reduces desired saving relative to desired investment (for a given level of output) causes the real interest rate to ________ and shifts the IS curve ________.

• A)increase; down and to the left
• B)increase; up and to the right
• C)decrease; down and to the left
• D)decrease; up and to the right

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Definitions:

Avoidant

Characterized by a tendency to evade or escape from stressful situations, often used in the context of personality or attachment styles.

Frustration-Aggression Model

A psychological theory suggesting that frustration leads to aggressive behavior because it induces an aggressive drive.

Long-Standing Feud

An ongoing conflict or disagreement that has persisted over a long period of time.

Stressors

Factors or experiences that cause stress in an individual.