Question

2) An increase in autonomous consumer expenditure causes the equilibrium level of
aggregate output to _____ at any given interest rate and shifts the _____ curve to the
_____.
(a) rise; LM; right
(b) rise; IS; right
(c) fall; LM; left (d) rise; IS; left

Answer 1

2) An increase in autonomous consumer expenditure causes the equilibrium level of aggregate output to increase at any given interest rate and shifts the IS curve to the right.

So, the correct answer is:

(b) rise; IS; right