Explain and/or show graphically, how the large increase in government spending would impact equilibrium in the IS-LM model. (You would need to clearly show/explain the path not just the result in the IS-LM model.) If drawing the graph(s), be sure to label all graphs, axis and any shifts of any curves.

Answer rating: 100% (QA)

In the ISLM model which stands for InvestmentSavingLiquidity PreferenceMoney Supply equilibrium occurs where the goods market IS curve and the money m... View the full answer