Match List-I (Property) with List-II (Type of Curve):
(A) Investment is unresponsive to interest rates
(B) Money demand is perfectly elastic w.r.t. interest rates
(C) Money demand is completely inelastic w.r.t. interest rates
(D) Investment is highly responsive to interest rates.
List II
(I) Relatively flat IS curve
(II) Vertical LM curve
(III) Horizontal LM curve
(IV) Vertical IS curve.
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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.
TestStop has 14 past-paper questions on this subtopic.
Question from the UGC-NET 2023 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.
