Question

. The IS Curve shows the relationship of income Y and interest i in the goods...

. The IS Curve shows the relationship of income Y and interest i in the goods market. What factors will shift the IS Curve to the left, meaning a decrease in spending at all levels of interest rate?

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Answer #1

all the factors shift the IS curve to the left which are unrelated to interest rate or income.

such are- a) A decrease in autonomous consumption expenditure.. that is a decrease in consumption will shift the is curve to the left at each level of interest rate.

b) a decrease in planned investment spending which is unrelate to interest cause to shift the is curve to the left.

c) A decrease in the government spending cause to shift the is curve to the left.

d) A decrease in the net export also shift the is curve to the left.

e) and when taxes are increases , the is curve shifts to the left.

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