Consider the IS curve a-bR-r) If there is no demand shock and ifb=2 and X 0.5, a 1 percent increase in the real interest 1-X rate will cause short-run output to OA. fall by 4 percent. OB. fall by 2 percent. OC. fall by 0.5 percent. OD.rise by 2 percent. O E. rise by 4 percent.
Consider the IS curve a-bR-r) If there is no demand shock and ifb=2 and X 0.5, a 1 percent increase in the real interest 1-X rate will cause short-run output to OA. fall by 4 percent. OB. fall by 2 percent. OC. fall by 0.5 percent. OD.rise by 2 percent. O E. rise by 4 percent.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![a-bR,-r)f there is no demand shock and if b 2 and X=0.5, a 1 percent increase in the real interest
Consider the IS curve
1-X
rate will cause short-run output to
OA. fall by 4 percent.
OB. fall by 2 percent.
OC. fall by 0.5 percent.
OD.rise by 2 percent.
O E. rise by 4 percent.
LG
U.S.ARMY
1HARINA
BUBE](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fae12195c-c4b8-4d80-93f5-6643e24af941%2F3afc3984-670e-4df9-8c3d-e44afb76f6b5%2F1xtq4jt_processed.jpeg&w=3840&q=75)
Transcribed Image Text:a-bR,-r)f there is no demand shock and if b 2 and X=0.5, a 1 percent increase in the real interest
Consider the IS curve
1-X
rate will cause short-run output to
OA. fall by 4 percent.
OB. fall by 2 percent.
OC. fall by 0.5 percent.
OD.rise by 2 percent.
O E. rise by 4 percent.
LG
U.S.ARMY
1HARINA
BUBE
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