When the IS Curve Is Drawn with the Nominal Interest

question 47

Multiple Choice

When the IS curve is drawn with the nominal interest rate on the vertical axis,a reduction in the expected inflation rate will cause

• A)the IS curve to shift rightward.
• B)the IS curve to shift leftward.
• C)the IS curve to become steeper.
• D)the IS curve to become flatter.
• E)no change in the IS curve.

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Definitions:

Value Chain

A series of activities that a company performs to create value for its customers, from product design to post-sale service.

Location Economies

The cost advantages gained by a business due to its geographical position, often influencing its competitiveness.

Meganational Strategy

A business strategy that emphasizes operating and competing in multiple countries as one global market.

Avoids Adaptation

a strategy where a business does not significantly alter its product or services to accommodate different cultural or market requirements in its expansion or operations.