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a) What is the LM curve? Explain and show the market equilibrium (draw the market outcome it is derived from) that it is derived from.

a) What is the LM curve? Explain and show the market equilibrium (draw the market outcome it is derived from) that it is derived from. A diagram would also be helpful. Make sure you use a properly labeled diagram. b) What is the IS curve? Explain and show the market equilibrium (draw the market outcome it is derived from) that it is derived from. Make sure you use a properly labeled diagram. c) Draw a diagram of the IS curve and a separate diagram of the LM curve. Show on each diagram the causes of shifts for each curve and the direction of each shift. d) Show, using and IS-LM analysis, what would occur in the very short run if a sudden decline in investor confidence took place. e) Show how the IS-LM model is related to the AD curve. Specifically, show how a change in price can be used in the IS-LM model to derive the AD curve relationship

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