Shift of the is curve


Explain which of these changes represent a move along the IS curve and/or which represent a shift of the IS curve and why.

PLEASE DO NOT ANSWER UNLESS YOU THOROUGHLY UNDERSTAND IS CURVES

(1) Stock market boom boosts consumption and investment

(2) Government cuts taxes by $50 billion

(3) Government passes $50 billion public works bill and pays for it with a $50 billion tax increase

(4) Fed boosts interest rate from 5% to 6%

(5) Tax receipts fall $30 billion as economy plunges into recession

(6) Value of the dollar rises 10%, cutting net exports by $40 billion

(7) Net exports rise $20 billion as Asian economy recovers

(8) Rise in interest rates diminishes housing starts

(9) Mortgage interest is no longer deductible, so housing starts decline

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Macroeconomics: Shift of the is curve
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