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Consider the Following Model of the IS Curve Without an International

Question 68

Multiple Choice

Consider the following model of the IS curve without an international sector:
Consumption: Ct=aˉcYˉtC _ { t } = \bar { a } _ { c } \bar { Y } _ { t }
Investment: It=aˉtYˉtI _ { t } = \bar { a } _ { t } \bar { Y } _ { t }
Government expenditure: Gt=aˉgYˉtG _ { t } = \bar { a } _ { g } \bar { Y } _ { t }
With this formulation the IS curve is:


A) horizontal
B) less steeply sloped than the "standard" IS curve
C) vertical
D) more steeply sloped than the "standard" IS curve
E) Not enough information is given.

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