In the IS Curve,if Y Falls for Any Given Level

question 4

Multiple Choice

In the IS curve,if Y falls for any given level of the real interest rate ________.

• A)consumption decreases
• B)output increases
• C)saving increases
• D)all of the above
• E)none of the above

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Definitions:

Optimal Weights

The most efficient proportion of different assets in an investment portfolio, aiming to maximize returns and minimize risk.

Expected Rate

The anticipated return or yield on an investment or financial instrument over a certain period.

Real Holding-period Return

The total return on an investment, accounting for inflation, over the period it is held, reflecting the true increase in purchasing power.

Real Rate of Return

The rate of profit or growth rate after adjusting for inflation.