the economics of money, banking, and financial markets

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65. Describe the relationship between the IS and MP curves and the aggregate demand curve.
    Answer: Any factor that shifts the IS curve shifts the aggregate demand curve in the same
    direction. When the MP curve shifts up, the aggregate demand curve shifts left; when the MP
    curve shifts down the aggregate demand curve shifts right.
    Diff: 2 Type: SA Page Ref: 546 - 566
    Skill: Recall
    Objective List: 23.1 Apply the IS-MP framework for the determination of aggregate output and
    the interest rate