In the IS Curve $\tilde { Y } _ { t } = \bar { a } - \bar { b } \left( R _ { t } - \bar { r } \right)$

question 52

Multiple Choice

In the IS curve $\tilde { Y } _ { t } = \bar { a } - \bar { b } \left( R _ { t } - \bar { r } \right)$ , the term $\bar { a }$
Is called:

• A) the tax rate
• B) the elasticity of output with respect to the interest rate
• C) a consumption expenditure shock
• D) the deviation of the real interest rate to the marginal product of capital
• E) an aggregate demand shock

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