An increase in the real interest rate
1. leads to a movement upward and to the right along
the LM curve and upward to the left along the IS curve.
2. will cause the LM curve to shift to the right and
the IS curve to shift to the left.
3. will lead to a movement upward and either to
the left or the right along the IS and LM curves depending on where they
cross.
4. will do none of the above.
Choose the option above that is correct.