Question: Consider the IS-LM model. Recall the y-axis is the interest rate and x-axis is the output. 31. (3pt) Why is the IS curve a downward

Consider the IS-LM model. Recall the y-axis is the interest rate and x-axis is the output.

31. (3pt) Why is the IS curve a downward sloping curve?

32. (3pt) Why is the LM curve a upward sloping curve?

33. (3pt) Use IS-LM model to explain how equilibrium output and equilibrium interest change if the government increase the government spending. You only need to explain the direction and don't need to explain the magnitude.

34. (3pt) Use IS-LM model to explain how equilibrium output and equilibrium interest change if the government supply more money. You only need to explain the direction and don't need to explain the magnitude.

3S. (3pt) If the equilibrium output goes up and equilibrium interest rate also goes up in a IS-LM model. How would the household consumption change in the equilibrium? You only need to explain the direction and don't need to explain the magnitude.

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