Question: Problem 1: ( 15 Points) Explain what does the IS schedule curve represents Derive graphically the IS curve Explainwhat happen to the shift of the

Problem 1: ( 15 Points)

  1. Explain what does the IS schedule curve represents
  2. Derive graphically the IS curve
  3. Explainwhat happen to the shift of the IS curve if government spending increases? Demonstrate on a graph and explain intuitively..

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