An excellent way to learn about how changes in various factors affect the IS and LM curves
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An excellent way to learn about how changes in various factors affect the IS and LM curves is to visit www.fgn.unisg.ch/eurmacro/tutor/islm.html. This site, sponsored by the World Bank, allows you to make changes and to observe immediately their impact on the ISLM model.
a. Increase G from 200 to 500. What happens to the interest rate?
b. Reduce t to 0.1. What happens to aggregate output Y?
c. Increase M to 450. What happens to the interest rate and aggregate output?
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a Increase G from 200 to 500 When government spending G increases the IS curve shifts to the right T...View the full answer
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Related Book For 
The Economics Of Money Banking And Financial Markets
ISBN: 9780321584717
4th Canadian Edition
Authors: Frederic S. Mishkin, Apostolos Serletis
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