What would happen to the IS curve if the following happened (answer assuming only one thing happens at a time). Carefully explain your reasoning. (4…
What would happen to the IS curve if the following happened (answer assuming only one thing happens at a time). Carefully explain your reasoning. (4 points each)
a. the marginal propensity to consume decreases
b. autonomous taxes rise
c. investment becomes less sensitive to the real interest rate (d gets smaller)
d. consumption becomes more sensitive to the real interest rate (c gets larger)


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