Macroeconomics
10th Edition
ISBN: 9781319105990
Author: Mankiw, N. Gregory.
Publisher: Worth Publishers,
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Question
Chapter 11, Problem 3QR
To determine
Explain the downward slope of the IS curve.
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Why does the IS curve slope downward? explain
What are some examples of changes in the economy that would lead to a movement along the IS curve? What are some changes that would shift the IS curve?
Explain what causes shifts in the IS curve.
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- The slope of the AS curve:Why does the AS curve slope upward?arrow_forwardWhy is the philip's curve not applicable in today's economyarrow_forwardWhat do the IS curve and the LM curve represent? What is the reason for their respective shape and what causes the IS and LM curves to shift?arrow_forward
- Why is inventory investment counted as part of aggregate spending if it isn’t actually sold to the final enduserarrow_forwardGiven the following, state whether the SAS curve will shift left, right, or not at all: 1.Productivity rises by 2% while wages rise by 5%. 2.Productivity falls by 1% while wages fall by 4% 3.Government imposes new taxes on the extraction of natural gas. 4.Incomes in Mexico increase. 5.Costs of imported cooking oils increases. 6.The U.S. Fed loosens monetary policy (increases the money supply)arrow_forwardWhat occurs as the economy moves leftward along the a given IS curvearrow_forward
- The AD curve can be shifted by...arrow_forwardName some factors that could cause AD to shift, and say whether they would shift AD to the tight or to the left.arrow_forwardIf foreign wealth-holders decide that the United States is the safest place to invest their savings, what would the effect be on the economy here? Show graphically using the AD/AS model.arrow_forward
- Does Says law apply more accurately in the long run or the short run? What about Keynes law?arrow_forwardWhy the AD CURVE has a negative slopearrow_forwardIn the IS/LM model, the IS curve maps interest rates and saving maps spending and income maps expenditure and money supply maps prices and output maps output and interest ratesarrow_forward
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