What would happen to the is curve

Reference no: EM132154290

Question: What would happen to the IS curve if the following happened (answer assuming only one thing happens at a time). Carefully explain your reasoning.

a. the marginal propensity to consume decreases

b. autonomous taxes rise

c. investment becomes less sensitive to the real interest rate (d gets smaller)

d. consumption becomes more sensitive to the real interest rate (c gets larger)

e. taxes are collected partly as an income tax (T = (constant)T +tY) rather than being exogenous ( T= (constant) T)

Reference no: EM132154290

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