The IS curve represents: 

Which of the following changes shift the LM curve to the left?

• Given the real money supply, an increase in output leads to an increase in the interest rate. Consequently, the LM curve is upward- sloping.

The assumptions of the IS-LM model are:

Suppose that government wants to reduce the public deficit, and therefore it increases taxes. At the same time, the central bank wants to strengthen the domestic currency and therefore it sells foreign reserves. What is the impact of this policy-mix on production and interest rate?

The crowding-out effect is a consequence of :

Fiscal contraction and monetary expansion can achieve a decrease in the budget deficit while avoiding a decrease in output.

If government spending and taxes increase by the same amount, the IS curve does not shift.

The LM curve is upward slopping because when income rises in a closed economy, the demand for money increases, and higher interest rate rises are needed to equilibrize money supply and money demand.

If all the exogenous variables in the IS relation are constant, then the higher level of output corresponds to a higher level of interest rate.