A Decline in Expected Future Output Would Cause the IS

question 9

Multiple Choice

A decline in expected future output would cause the IS curve to

• A)shift up and to the right.
• B)shift down and to the left.
• C)remain unchanged.
• D)shift up and to the right only if people face borrowing constraints.

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Definitions:

Correcting Entries

Journal entries made to amend previously recorded transactions that were incorrect or incomplete.

Operating Cycle

The duration of time it takes for a company to purchase inventory, sell it to customers, and collect the cash from these sales.

Fiscal Year

A twelve-month period used for accounting purposes and preparing financial statements, which may or may not align with the calendar year.

Owner's Drawings

A withdrawal by the owner of a business for personal use, reducing the equity in the business.