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Suppose an exogenous shock in the form of widespread bank failures that reduce the ow of credit and decrease the money supply pushes the economy

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Suppose an exogenous shock in the form of widespread bank failures that reduce the ow of credit and decrease the money supply pushes the economy away from its equilibrium position. (9 points} c} Based on the IS-LM model, which curve will shift and why? d) Using the IS-LM model, predict what happens to the following variables in the short run. Income: Interest Rate: Consumption: Investment: Unemployment Prices

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