A Shift to the Left by the IS Curve Can

question 78

Multiple Choice

A shift to the left by the IS curve can be achieved by all of the following, EXCEPT a(n) :

• A) decrease in government spending.
• B) increase in taxes.
• C) increase in the foreign interest rate.
• D) increase in the domestic price level.

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Definitions:

Fiscal Policy

Government policies concerning taxation and spending that are aimed at influencing macroeconomic conditions, including unemployment, inflation, and economic growth.

Fiscal Policy

Government policies related to taxation and spending aimed at influencing the economy.

MPC

Marginal Propensity to Consume, a metric in economics that measures the proportion of income changes that is spent on consumption.

Crowding Out

A decrease in investment that results from government borrowing.