Consider the Following Model of the IS Curve Without an International

question 43

Multiple Choice

Consider the following model of the IS curve without an international sector:
Consumption: $C _ { t} / \bar { Y } _ { t } = \bar { a } _ { c } - \bar { b } _ { c } \left( R _ { t } - \bar { r } \right)$ ; Investment: $I _ { t } / \bar { Y } _ { t } = \bar { a } _ { i } - \bar { b } _ { i } \left( R _ { t } - \bar { r } \right) ;$ Government expenditure: $G _ { t } = \bar { a } _ { g } \bar { y } _ { t }.$ With this formulation, the IS curve is:

• A) horizontal
• B) vertical
• C) less steeply sloped than the "standard" IS curve
• D) more steeply sloped than the "standard" IS curve
• E) Not enough information is given.

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Definitions:

Corporate Social Responsibility

A business model that helps a company be socially accountable—to itself, its stakeholders, and the public—by practicing sustainable and ethical operations across all aspects.

Universality

A principle or concept that is applicable or relevant across all situations, cultures, or contexts without exception.

Management Principles

Fundamental guidelines or rules for managing an organization effectively, often encompassing planning, organizing, leading, and controlling.

Archie Carroll

Archie Carroll is known for his work on corporate social responsibility (CSR), particularly for developing a pyramid model that outlines the responsibilities of businesses in society.