The IS curve shifts to the right when there is __________.

Question image

Understand the Problem

The question is asking for the condition under which the IS curve in economics shifts to the right, implying an increase in output or aggregate demand. The user is likely trying to understand the relationship between government spending and the IS curve in financial markets.

Answer

An increase in government spending

The final answer is an increase in government spending.

Answer for screen readers

The final answer is an increase in government spending.

More Information

An increase in government spending boosts aggregate demand, resulting in a rightward shift of the IS curve as it raises output for each interest rate level.

Tips

Confusing the effects of fiscal policy (government spending) with monetary policy (interest rates) changes.

Thank you for voting!
Use Quizgecko on...
Browser
Browser