Answer to Question #243842 in Microeconomics for Dilimi

Question #243842
How and why the multiplier and the interest sensivity of aggregate demand affect the slope of the IS curve
1
Expert's answer
2021-09-29T09:53:27-0400

When investment spending tends to be much sensitive towards interest rate, respective interest rate change leads to huge adjustments within the aggregate. Provided that IS curve's slope is based on multiplier, the fiscal policy may impact the slope.


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