The IS Curve Will Shift to the Left When Which

question 14

Multiple Choice

The IS curve will shift to the left when which of the following occurs?

• A)a reduction in the money supply
• B)a reduction in government spending
• C)an increase in the interest rate
• D)all of the above
• E) none of the above

---

Definitions:

Budget Constraint

The limits imposed on household or individual choices by income, wealth, and product prices, dictating the combination of goods and services that can be purchased.

Price

The cost associated with acquiring a good, service, or asset.

Income Decreases

A situation where an individual's or household's earnings fall over a period, affecting their purchasing power and standard of living.

Choice Set

The collection of options or alternatives from which a decision-maker is able to choose in a decision-making process.