Write a 3 pages paper on applied macroeconomics. iii. The decline in the personal savings rate of Americans will result in the shift of the IS Curve to the right. iv. A drop in business confidence following the collapse of the stock market will shift the IS Curve to the left.4. A change in which of the following would cause the LM curve to shift To rotate, To both shift and rotate Which of these do not affect the slope or position of the LM curve i. nominal money supply (Ms) affects the position of the LM curve. The increase in the nominal money supply would cause the LM curve to move to the right.ii. the responsiveness of the demand for money to the interest rate influences the slope of the LM curve. The more responsive the demand fore money with regard to the interest rates level is, the less steep the slope of the LM curve will be.iii. the responsiveness of the demand for money to income also influences the slope of the curve. The more responsive the demand fore money to the income level is, the steeper the LM curve will be.iv. business and consumer confidence level changes have influence on the slope of the LM curve and, therefore, would cause the LM curve to rotate.v. interest rate (r) does not affect the position or slope of the LM curve. The change in interest results in change in quantity of real balances demanded and results in movement along the LM curve.vi. price level (P) influences real money demand and, as a result shift the LM curve. If the price level increases, the real demand for money decreases and the LM curve shifts to the left. 5. Explain the concept of “crowding-out”.
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