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    Question

    IS curve shows that when income decreases

    A Interest rate must fall to restore equilibrium in the goods market Correct Answer Incorrect Answer
    B Interest rate must fall to restore Equilibrium in the asset market Correct Answer Incorrect Answer
    C Interest rate must rise to restore equilibrium in the asset market Correct Answer Incorrect Answer
    D Interest rate must rise to restore equilibrium in the goods market Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    IS curve shows that when income decreases interest rate must rise to restore equilibrium in the goods market

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