Suppose that investment (I) in the goods market is not responsive to the interest rate. Then
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UoH 2018 Question 32: 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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