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Use the IS-LM model to analyze the effects of a housing market crash that reduces consumers' wealth (This is a shock to the IS) consumers

Use the IS-LM model to analyze the effects of

  1. a housing market crash that reduces consumers' wealth (This is a shock to the IS)
  2. consumers using cash in transactions more frequently in response to an increase in identity theft (This is a shock to the LM)

For each shock,

  1. use the IS-LM diagram to determine the effects on Y and r.
  2. figure out what happens to C, I, and the unemployment rate.

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