1.If the government were to increase in public education, what would we expect to happen to the IS curve initially?

A)It shifts to the left because increased government spending reduces the amount of National Savings

B)There is a movement along the curve to the left because the interest rate will increase

C)It shifts to the right because increased government spending directly expands income/output

D)The is a movement along the curve to the right because increased government spending directly expands income/output.

2.The IS curve represents:

A)The level of investment in the Loanable Funds Market.

B)The level of savings in the Loanable Funds Market.

C)The level of consumption in the goods and service marker.

D)Equilibrium in the goods and services market.

3.If you were to derive the IS curve graphically, which would you refer to?

A)The Keynesian Cross and the Loanable Funds Market.

B)The Consumption function and the Loanable Funds Market.

C)The Keynesian Cross and the Consumption function.

D)National Savings function.

4.Why is the IS-LM model useful?

A)It is no longer useful but it does give us insight into how Keynesian thinking was applied.

B)It is only useful for deriving monetary policy impacts.

C)It is only useful for deriving fiscal policy impacts.

D)It is useful for attaining general insights for how policy changes will impact the economy.

5.If interest rates decreases, what does the IS curve shows us about Y?

A)Y will remain constant as the IS curve shifts left.

B)A movement along in which Y will increase, as investment and consumption are cheaper.

C)A shift in the IS which Y will increase, as investment and consumption are cheaper.

D)Y will increase as the IS curve shift left.

6.How will fiscal policy changes impact the IS curve?

A)Always shift the curve upwards.

B)Always shift the curve downwards.

C)Always results in a movement along the curve, depending on the policy change.

D)Always shift the curve, depending on the policy change.