Use the equation for the is curve to discuss what happens


Use the equation for the IS curve to discuss what happens to the IS curve in response to the following shocks. in each case provide a real world example of what might cause the shock.

a) Increase in autonomous consumption (IE C_o increases)

b) A reduction in the interest sensitivity of investment (IE A_1 decreases)

c) An increase in the marginal rate of taxation (IE T increases)

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Business Economics: Use the equation for the is curve to discuss what happens
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