What causes a shift in the IS curve?

A shift in the IS curve, which depicts the relationship between real GDP and the interest rate, can be caused by various factors. One major factor is changes in investment. When there is an increase in investment, it leads to an upward shift in the IS curve, as higher investment levels lead to higher levels of real GDP at every interest rate. Conversely, a decrease in investment results in a downward shift in the IS curve. Other factors that can cause a shift in the IS curve include changes in government spending, changes in taxes, changes in consumer confidence, or changes in expectations about future economic conditions.

Fiscal Policy Monetary Policy Investment Government Spending Interest Rates

What causes a shift in the IS curve?

This mind map was published on 18 September 2023 and has been viewed 85 times.

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