Suppose the Federal government increases spending ( G ). How does this change the equilibrium of the IS-LM curves? Be sure to cover: Does it shift the IS curve? If so, does it shift by more or less than the size of the change in spending? Does it shift the LM curve? If so, does it shift by more or less than the size of the change in spending? Is equilibrium output or interest rate changed? If so, how does equilibrium interest change (increase, decrease, or stay the same) and how much does output change by (more, less, or equal to the original shift in either the IS or LM curves)