The Negative Relation Between Investment Spending and the Interest Rate

question 129

Multiple Choice

The negative relation between investment spending and the interest rate is what gives the ________ curve its ________ slope.

• A)IS;upward
• B)IS;downward
• C)LM;downward
• D)LM;upward

---

Definitions:

Net Income

The total profit of a company after all expenses, including taxes and operating costs, are subtracted from total revenue.

Revenue

The income received by a company from its business activities, usually from the sale of goods and services to customers.

Expenses

Money spent or cost incurred in an entity's efforts to generate revenue, representing the cost of doing business.

Liability

An obligation of the company that arises from past transactions or events, leading to a probable future sacrifice of economic benefits.