The Dow Jones Industrial Average Rose More Than 1,080 Points

Multiple Choice

The Dow Jones Industrial Average rose more than 1,080 points on December 26, 2018. How does a change like this impact the IS curve?

A) The increase in perceived wealth will lead to an increase in taxes, which will cause a left shift of the IS curve.
B) The increase in the real interest rate lowers consumption, which causes a movement down and to the right along the same IS curve.
C) The increase in perceived wealth lowers consumption, which shifts the IS curve to the left.
D) The increase in perceived wealth boosts consumption, which shifts the IS curve to the right.