Use the equation for the IS curve shown in Section 1.2.3 and Fig. 1.6 to discuss what happens to the IS curve in response to the following shocks. In each case provide a real world example of what might cause the shock.

(a) An increase in autonomous consumption (i.e.0)

(b) A reduction in the interest sensitivity of investment (i.e.1) (c) An increase in the marginal rate of taxation (i.e.)