When the Multiplier Is Included in the IS Curve

question 51

Multiple Choice

When the multiplier is included in the IS curve,

• A)a demand shock has a larger impact on short-run fluctuations than with the standard IS curve.
• B)a change in the real interest rate has a larger impact on short-run fluctuations than with the standard IS curve.
• C)a demand shock has a smaller impact on short-run fluctuations than with the standard IS curve.
• D)a change in taxes has no impact on short-run output.
• E)a and b are correct.

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Definitions:

Confidence Interval

A collection of values from sample statistics, which is anticipated to capture the value of an obscure population parameter.

Population Mean

The average of all the values in a population, providing a summary measure of the population's central tendency.

CEOs

Chief Executive Officers, the highest-ranking executives in companies, responsible for making major corporate decisions, managing overall operations, and acting as the main point of communication between the board of directors and corporate operations.

Total Compensation

The complete reward package provided to an employee, including base salary, bonuses, benefits, and any other financial remunerations.