When the Multiplier Is Included in the IS Curve, A

question 66

Multiple Choice

When the multiplier is included in the IS curve, a:

• A) demand shock has a larger impact on short-run fluctuations than with the standard IS curve.
• B) change in the real interest rate has a smaller impact on short-run fluctuations than with the standard IS curve.
• C) demand shock has a smaller impact on short-run fluctuations than with the standard IS curve.
• D) change in taxes has no impact on short-run output.
• E) change in the marginal product of capital has a smaller effect on short-run fluctuations in output than with the standard IS curve.

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Definitions:

Attribution Theory

A psychological theory that explains how individuals infer the causes of their own and other people's behavior, attributing them to either internal dispositions or external situations.

Dimensions

Measures or aspects that define the characteristics of an object, situation, or experience.

Behavior

The behavior or responses of a person or system when influenced by external or internal factors.

Stereotypes

Oversimplified generalizations about a group of people that often do not consider individual differences and can lead to biased judgments.