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Questions › IIT JAM › IIT JAM 2024 › Q4
1 mark, −0.333Macroeconomics › IS-LM model › The slope of the IS curveModerateabout 1 min

IIT JAM 2024 Question 4: IS-LM model

Consider a closed economy with consumption function C=2+0.5YC = 2 + 0.5YC=2+0.5Y, where YYY is income. The government expenditure is 333 and investment function is I=4−0.5rI = 4 - 0.5rI=4−0.5r, where rrr is interest rate. Then, the slope of the IS curve will be

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Consider a closed economy with consumption function C = 2 + 0.5Y, where Y is income. The government expenditure is 3 and investment function is I = 4 - 0.5r, where r is interest rate. Then, the slope of the IS curve will be (A) 1 (B) -0.5 (C) 1.5 (D) -1

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.

TestStop has 14 past-paper questions on this subtopic.

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