Last Name (e) Employment 1. Show how what happens on the Keynesian Cross graph, (f) Production, Income the IS, LM graph, and the Philips Curve graph when investor confidence rises. Assume that the Central (g) IS curve ( or =) Bank acts to bring output and inflation back to their (h) LM curve full-employment levels. 3. Let to represent the state of the economy before any changes. Let to represent the end of the short-term, and to represent the end of the medium-term. Compare t2 with to in terms of the following variables. (a) inflation (b) LM curve (c r (d) Investment (e) Consumption (f) Demand (Z) (g) Production, Income 4. Show what happens on the Keynesian Cross and Net Exports graphs when investor confidence rises. Figure 1: Keynesian Cross and Net Exports 2. Based on the graph above, indicate whether the follow- ing elements rise (f), fall ((), or stay the same () in the short-term. (a) Investor Confidence