The foundation of the IS curve is the equation ________, which is the ________.
A) $Y _ { t } = C _ { t } + I _ { t } + G _ { t } + E X _ { t } - L M _ { t }$ ; national income identity
B) $Y _ { t } = C _ { t } + I _ { t } + G _ { t } + L M _ { t }$ ; national income identity
C) $Y _ { t } = C _ { t } + I _ { t } + G _ { t }$ ; national income identity
D) $Y _ { t } = C _ { t } + I _ { t } + G _ { t } + E X _ { t } - L M _ { t }$ ; current account
E) $Y _ { t } = C _ { t } + I _ { t } + G _ { t } + L M _ { t } - E X _ { t }$ ; current account

Question

Quizplus · Accepted Answer

The IS curve is based on the national income identity, which is represented by the equation $Y _ { t } = C _ { t } + I _ { t } + G _ { t } + E X _ { t } - D M _ { t }$, where $Y$ is the total output or income, $C$ is consumption, $I$ is investment, $G$ is government spending, $EX$ is exports, and $DM$ is imports.

The Foundation of the IS Curve Is the Equation ________ Yt=Ct+It+Gt+EXt−LMtY _ { t } = C _ { t } + I _ { t } + G _ { t } + E X _ { t } - L M _ { t }Yt​=Ct​+It​+Gt​+EXt​−LMt​

The Foundation of the IS Curve Is the Equation ________ $Y _ { t } = C _ { t } + I _ { t } + G _ { t } + E X _ { t } - L M _ { t }$