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

question 64

Multiple Choice

In the IS model,assuming that the real interest rate does not change,an increase in ________ leads to an increase in equilibrium saving by households.

• A)autonomous investment
• B)government purchases
• C)autonomous net exports
• D)all of the above
• E)none of the above

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Definitions:

Piece-rate Garment Worker

A worker in the garment industry who is paid for each piece produced, rather than receiving an hourly wage.

Hourly Salesman

A salesperson who is compensated based on the number of hours worked, rather than commission on sales made.

Moral Hazard

A situation where one party is inclined to take risks because the negative consequences of the risk will be borne by another party.

Taxi Driver

An individual who operates a car licensed for providing taxicab transportation services to passengers in exchange for payment of a fare.