At points to the

left

of the IS curve,

A.there is an excess demand for goods comma which leads to an unplanned decrease in inventories.

there is an excess demand for goods comma which leads tothereisanexcessdemandforgoods,whichleadsto

an unplanned decrease in inventories.anunplanneddecreaseininventories.

Your answer is correct.

B.

there is an excess demand for goods, which leads to an unplanned increase in inventories.

C.

there is an excess supply of goods, which leads to an unplanned decrease in inventories.

D.there is an excess supply of goods comma which leads to an unplanned increase in inventories.

there is an excess supply of goods comma which leads to anthereisanexcesssupplyofgoods,whichleadstoan

unplanned increase in inventories.

Refer to the figure on your right.

1.) Use the point drawing tool to locate a point on the graph depicting excess

supply of supplyof goods.

Part 3Carefully follow the instructions above, and only draw the required object.

Real Interest Rate, r IS Curve Aggregate Output, Y