Question

(1). The position of IS Curve depends on________.
(a).rate of interest.
(b).rate of investment.
(c). autonomous expenditure.
(d). none of the above.​

Answer 1

Autonomous expenditure

Answer 2

The position of the IS curve depends on the autonomous expenditure.

• The shift in an IS curve is generally caused due to changes in taxes and the autonomous expenditure.
• The IS curve illustrates the set of all interest rate and production levels at which total expenditure is equal to the total savings
• Investment is generally higher at minimal interest rates, which then translates into more overall GDP, making the IS curve sloping downwards and to the right.