What is the Global Financial Crisis (GFC)? What caused it and why did it spread? What impact did the GFC have on the economy in Singapore? Discuss and incorporate the IS-LM model for the Singaporean economy.

i) First, use the IS-LM model to illustrate and discuss the impact of the GFC on interest rates and economic activity. Remember to explain any changes you have made to the curve(s) and/or any shift(s) you have shown.

ii) Second, as a consequence of what you have shown in step i) use the IS-LM framework to illustrate and discuss the impact of policy responses from both the government and central bank to the GFC and what this means for interest rates and economic activity. Remember to explain any changes you have made to the curves and/or any shift(s) you have undertaken.