a) Briefly, explain what the IS curve and the LM curve represent. b) Explain the reason that

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a) Briefly, explain what the IS curve and the LM curve represent.

b) Explain the reason that determines the slope of the IS curve and the factors that would make the IS curve steeper.

c) Explain the reason that would determine the slope of the LM curve and outline what would shift the curve to the right.

d) Use an IS-LM diagram to illustrate and explain why the interest rate is likely to decline during an economic contraction that is caused by negative business confidence.

e) How would a reduction in inflation impact on real money balances and the LM curve?

Related Book For answer-question

Macroeconomics

ISBN: 978-0138014919

12th edition

Authors: Robert J Gordon

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Posted Date: Feb 04, 2024 01:43 AM

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a) Briefly, explain what the IS curve and the LM curve represent. b) Explain the reason that

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ISLM Model Breakdown a Representing Markets IS InvestmentSaving Curve Represents combinations of real output and interest rate where planned investmen... View the full answer

Macroeconomics

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