Using the ISLM Model,explain and Show Graphically the Effect of a Fiscal

question 48

Essay

Using the ISLM model,explain and show graphically the effect of a fiscal expansion when the demand for money is completely insensitive to changes in the interest rate. What is this effect called?

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Definitions:

Relaxation

The state or process of becoming less tense, anxious, or stressed; often involves activities or techniques that promote this state.

Type A

A behavior pattern characterized by competitiveness, urgency, aggression, and an heightened stress response.

Stressor

A stressor is any event or situation that triggers physical or psychological stress.

Environmental Event

An occurrence within the environment that can influence the behavior or psychological state of an individual or group.