Consider the Following Model of the IS Curve Without an International

question 74

Multiple Choice

Consider the following model of the IS curve without an international sector:
Consumption:
;
Investment:
; and
Government expenditure:
)
With this formulation the IS curve is:

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

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