In the IS Curve $\tilde { Y } _ { t }$

question 57

Multiple Choice

In the IS curve, $\tilde { Y } _ { t }$ is given by ________, where $Y _ { t }$
Is current output and $\bar { Y } _ { t }$ Is potential output.

• A) \(Y _ { t } / \bar { Y } _ { t }\)
• B) \(\left( Y _ { t } - \bar { Y } _ { t } \right) / \bar { Y } _ { t }\)
• C) \(\left( \bar { Y } _ { t } - Y _ { t } \right) / \bar { Y } _ { t }\)
• D) \(Y _ { t } - \bar { Y } _ { t }\)
• E) \(Y _ { t } \times \bar { Y } _ { t }\)

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Definitions:

Bond Interest Expense

The cost incurred by an issuer of bonds for the interest payments made to bondholders.

Cash

Liquid assets held by a company or person, used for transactions or as a store of value.

Maturity Date

The date on which a financial obligation must be repaid or settled in full.

Principal Repaid

The amount of a loan's principal that has been paid back to the lender, not including interest payments.