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The IS Curve Becomes Steeper When

Question 5

Multiple Choice

The IS curve becomes steeper when:


A) government spending is relatively small.
B) changes in the current real interest rate cause small changes in current demand.
C) the income tax rate in the current period is relatively small.
D) changes in the current nominal interest rate cause small changes in current demand.
E) current changes in the real interest rate cause large changes in current real output.

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