(Solved): 10. We consider the IS model where investment is given by \( \frac{I}{\bar{Y}}=\bar{a}_{i}-\bar{b} ...

10. We consider the IS model where investment is given by \( \frac{I}{\bar{Y}}=\bar{a}_{i}-\bar{b}(R-\bar{r}) . \) An increase in the coefficient \( \bar{a}_{i} \) the government purchase multiplier. a. Raises d. Raises if \( R>\bar{r} \) b. Reduces e. Raises if \( R<\bar{r} \) c. Does not affect 23. Consider the IS model and suppose the economy starts in a long run equilibrium. An increase in the real interest rate corresponds to the IS curve and short-run output becomes a. A shift to the right of; positive d. A shift to the left; zero b. A shift to the left of; positive e. A move along; negative c. A move along; positive