In the IS-LM model seen in class, consumption only depends on disposable income. What happens if it also depends on the interest rate? Concretely, let's change C (Y^d ) to C (Y^d, r) where Cy^d (Y^d, r) > 0 and Cr (Y^d, r) < 0. The intuition is that people spend more when their available income increases and are more tempted to buy expensive items like cars and houses when financing is cheap (i.e. when the interest rate is low)