If everybody in the economy decides to consume a higher proportion of their income, the corresponding IS curve
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DSE 2011 Question 16: IS-LM model
Answer and worked solution
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IS-LM model has come up 137 times in 7 exams since 2004.
What this question tests
This question is on The slope of the IS curve, part of IS-LM model in Macroeconomics.
What makes the IS curve steep or flat, including the multiplier and the interest sensitivity of investment.
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Question from the DSE 2011 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.