The IS Curve Has A

Multiple Choice

The IS curve has a:

A) positive slope because a higher interest rate leads to an increase in foreign investment and thus raises the level of aggregate income.
B) negative slope because a higher interest rate leads to a decrease in government spending which reduces domestic output level.
C) negative slope because a higher interest rate leads to a decrease in aggregate demand that results in lowering of domestic production level.
D) positive slope because a higher interest rate leads to an increase in aggregate savings and thus an increase in domestic real investment.