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Using the IS-LM model. For the past few days, stock market indices such at the S&P 500 and the Dow Jones Industrial Average have fallen

Using the IS-LM model. For the past few days, stock market indices such at the S&P 500 and the Dow Jones Industrial Average have fallen dramatically due to Coronavirus fears.[1] Say we want to use the IS-LM model to evaluate the impact on output and interest rates. Our first task is to re-specify our model to include a wealth variable since that is our variable of interest:

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