Question
Put a T if the statement is True or an F if it is False 1. The main determinants of investment are the level of
Put a T if the statement is True or an F if it is False
1. The main determinants of investment are the level of sales and the interest rate ()
2. If all the exogenous variables of the IS relationship are constant, it is only possible to increase production by lowering the interest rate ()
3. The IS curve has a negative slope because the equilibrium of the goods market implies that a rise in taxes causes a reduction in the level of production ()
4. If both public spending and taxes increase by the same amount, the IS curve does not shift ()
5. The LM curve has a positive slope because to increase production it is necessary to increase the money supply ()
6. It is only possible to increase production with a constant interest rate using a combination of monetary and fiscal measures ()
7. An increase in the income tax rate causes the IS curve to be more elastic ()
8. The LM curve will be relatively flat if the elasticity of the demand for money with respect to the interest rate is relatively low ()
9. An increase in investment due to a decrease in the interest rate, leads to a movement along the IS curve to the left ()
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started