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According to the IS-LM model, what happens to the interest rate, income, consumption, and investment under the following circumstances? For each of the circumstances, draw
According to the IS-LM model, what happens to the interest rate, income, consumption, and investment under the following circumstances? For each of the circumstances, draw the IS-LM graph and show how the curves shift. (a) The central bank decreases the money supply.
(b) The government decreases government purchases. (c) The government decreases taxes.
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