A vertical IS curve comes from the assumption that changes in the interest rate do not affect
A) money demand.
B) the money supply.
C) autonomous planned spending.
D) the LM curve.

Question

Quizplus · Accepted Answer

A vertical IS curve implies that changes in the interest rate do not affect autonomous planned spending, meaning investment and other components of spending are not sensitive to interest rate changes.

A Vertical IS Curve Comes from the Assumption That Changes