Based on required Readings (Ch#7) and Lecture Videos for this unit, respond to the following question:

Using a graph of the IS-LM model, show and explain how (a) income and, (b) the interest rate, are affected by each of the following:

1. An increase in government spending.
2. An increase in taxes
3. An increase in the money supply

In each case, explain why the changes in income and the interest rate occur.