Which of the Following Is a General Rule for How

question 53

Multiple Choice

Which of the following is a general rule for how demand shocks affect the IS curve?

• A) Demand shocks will always show up as changes in the expected real exchange rate.
• B) Demand shocks are usually rare and have little effect.
• C) When any exogenous variable works to increase demand, IS shifts to the right and, conversely, when any exogenous variable works to decrease demand, IS shifts to the left.
• D) When any exogenous variable works to increase demand, IS shifts to the left and conversely, when any exogenous variable works to decrease demand, IS shifts to the right.

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A self-contained unit or component within a larger system, often interchangeable and designed for easy assembly or flexible use.