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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 ()

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