The IS curve shifts to the right when there is __________.
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.
Sources
- The IS curve shifts to the right when ___ - Homework.Study.com - homework.study.com
- Chapter 7 The IS curve: the interest rate and the goods market - eng.mgwk.de
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