In the IS Model,assuming That the Real Interest Rate Does

question 8

Multiple Choice

In the IS model,assuming that the real interest rate does not change,an increase in autonomous ________ leads to an increase in the equilibrium level of ________.

• A)investment;consumption
• B)consumption;investment
• C)net exports;investment
• D)all of the above
• E)none of the above

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Definitions:

Discount

A reduction applied to the normal selling price of goods or services, often used as an incentive to increase sales or clear inventory.

Bonds

Fixed-income securities issued by corporations, governments, or other entities to finance projects or operations, promising to pay back the principal with interest.

Cash Received

The total amount of money received by a company during a specific period, including revenues, loans, and investment income.

Issued

Refers to securities that have been distributed to investors, typically shares of stock or bonds that the company has sold to the public.