Essay
-Referring to the graph above,assume that the economy is in equilibrium at point A,then an increase in government purchases shifts the IS curve to the right,while the real interest rate remains constant.Explain,step-by-step,how the components of expenditure adjust to bring the economy to its new equilibrium.
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Q51: An decrease in the real interest rate
Q52: Planned investment spending _.<br>A)is equal to planned
Q53: If aggregate output is above its equilibrium
Q54: The IS curve shifts to the left
Q55: We may infer from the downward slope
Q57: The consumption function shows how _.<br>A)the marginal
Q58: A decrease in autonomous consumption _.<br>A)lowers planned
Q59: If planned expenditure is below output,as the
Q60: If the government reduces spending _.<br>A)the IS
Q61: Consumption expenditure is 15,000,government purchases are 5,000,planned