Answered: Briefly describe the IS curve and draw…

Briefly describe the IS curve and draw a full IS-LM-FE graph. List two factors that can shift IS and show these changes on a new graph.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter4: Demand, Supply, And Market Equilibrium

Section: Chapter Questions

Problem 17P

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Concept explainers

Laffer Curve Analysis

In terms of economics, the Laffer curve was popular among those economists who were or who belonged to the supply side of the economic peripheral. This concept was popularized by the famous supply-side economist known as Arthur Laffer. This curve illustrated the relationship between the tax rates and government revenue. It is already known that the tax which the public or individuals residing in an economy bear is the revenue or income of the government with the help of which the government does all the necessary works in the society, which is beneficial for the economy.

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Briefly describe the IS curve and draw a full IS-LM-FE graph. List two factors that can shift IS and show these changes on a new graph.

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