QUESTION 2 [28 MARKS] 2.1. A reputable Investment Banker convinces South Africans to increase a share of their income devoted to saving. Based on this statement use the IS-LM model to predict the effects of the shocks on income, the interest rate, consumption, and investment. Additionally, end by explaining what the Reserve Bank should do to keep income at its initial level. (10) 2.2. Explain the impact of monetary and fiscal policy in the case where investment does not depend on the interest rate, the IS curve is vertical.(6) 2.3According to the World Bank Group, most countries are said to be using a system of floating or flexible exchange rate regime. With the aid of a well-labelled diagram, illustrate its mechanisms on how the foreign exchange rate market would cause a currency (wr) to adjust (depreciate or appreciate) if an expansionary monetary policy is implemented. (12)