An increase in investment demand for any given level of income and interest
rates—due, for example, to more optimistic "animal spirits"—will, within the IS-LM
framework, output and interest rates.
A) increase; lower
B) increase; raise
C) lower; lower
D) lower; raise

The increase in the amount of investment will cause the increase in real production. Moreover, an increase in the investment decisions of entrepreneurs will have a multiplier effect on the economy since it will allow an increase in the income of the factors of the investment goods industry; part of this increase will be used for consumption which will cause cascading increases in the income of other factors.

An increase in investment demand for any given level of income and interest rates—due, for example, to more optimistic "animal spirits"—will, within the IS-LM framework, ______ output and ______ interest rates. A) increase; lower B) increase; raise C) lower; lower D) lower; raise

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An increase in investment demand for any given level of income and interest
rates—due, for example, to more optimistic "animal spirits"—will, within the IS-LM
framework, output and interest rates.
A) increase; lower
B) increase; raise
C) lower; lower
D) lower; raise