Consider the IS curve a-bR-r) If there is no demand shock and ifb=2 and X 0.5, a 1 percent increase in the real interest 1-X rate will cause short-run output to OA. fall by 4 percent. OB. fall by 2 percent. OC. fall by 0.5 percent. OD.rise by 2 percent. O E. rise by 4 percent.

Consider the IS curve a-bR-r) If there is no demand shock and ifb=2 and X 0.5, a 1 percent increase in the real interest 1-X rate will cause short-run output to OA. fall by 4 percent. OB. fall by 2 percent. OC. fall by 0.5 percent. OD.rise by 2 percent. O E. rise by 4 percent.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

a-bR,-r)f there is no demand shock and if b 2 and X=0.5, a 1 percent increase in the real interest
Consider the IS curve
1-X
rate will cause short-run output to
OA. fall by 4 percent.
OB. fall by 2 percent.
OC. fall by 0.5 percent.
OD.rise by 2 percent.
O E. rise by 4 percent.
LG
U.S.ARMY
1HARINA
BUBE

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