Question

A decline in expected future output would cause the IS curve to __________.a. shift up and to the right. b. shift down and to the left. c. remain unchanged. d. shift up and to the right only if people face borrowing constraints

Answer 1

Answer:Its what he said B

Step-by-step explanation:

Its B because if you were to look at it would show by the arrows what direction its going in.

Answer 2

b. shift down and to the left

Step-by-step explanation:

The IS curve shows the combinations of output and the real interest rate for which the goods market is in equilibrium.

Any change that reduces desired saving relative to desired investment (for a given level of output) causes the real interest rate to increase and shifts the IS curve up and to the right.

A decline in expected future output would cause the IS curve to shift down and to the left.

A decrease in the effective tax rate on capital would cause the IS curve to shift up and to the right.