Business, 11.05.2021 04:30 borgesalfonso12

The reason that the income response to a fiscal expansion is generally less in the IS-LM model than it is in the Keynesian-cross model is that the Keynesian-cross model assumes that: a. investment is not affected by the interest rate whereas in the IS-LM model fiscal expansion raises the interest rate and crowds out investment. b. investment is not affected by the interest rate whereas in the IS-LM model fiscal expansion lowers the interest rate and crowds out investment. c. investment is autonomous whereas in the IS-LM model fiscal expansion encourages higher investment, which raises the interest rate. d. the price level is fixed whereas in the IS-LM model it is allowed to vary.

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The reason that the income response to a fiscal expansion is generally less in the IS-LM model than...