A rise in autonomous planned investment spending causes the equilibrium level of aggregate output to ________ and shifts the ________ curve to the ________, everything else held constant.
A) rise; MP; right
B) rise; IS; right
C) fall; IS; left
D) fall; MP; left

Question

Quizplus · Accepted Answer

An increase in autonomous planned investment spending would shift the IS curve to the right, leading to a rise in the equilibrium level of aggregate output, assuming everything else held constant. The MP curve is not directly affected by changes in autonomous planned investment spending.

A Rise in Autonomous Planned Investment Spending Causes the Equilibrium