Given the investment function, I = f – hr, as the interest sensitivity of investment falls, that is as h falls, the IS curve gets A

Economics Nov 07, 2020

Given the investment function, I = f – hr, as the interest sensitivity of investment falls, that is as h falls, the IS curve gets
A. flatter but shifts more when government spending increases
B. steeper but shifts more when government spending increases
C. flatter but shifts less when government spending increases
D. steeper but shifts less when government spending increases
E. none of the other answers is correct

Expert Solution

Option C

flatter but shifs less when government spending increases

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