Multiple Choice
Consider the IS curve . If there is no demand shock and
And
, a 1 percent increase in the real interest rate causes short-run output to:
A) fall by 2 percent.
B) rise by 4 percent.
C) fall by 4 percent.
D) fall by 0.5 percent.
E) Not enough information is given.
Correct Answer:

Verified
Correct Answer:
Verified
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