In this question you must derive the IS curve by assuming that the interest rate decreases. You first consider the impact of a decrease in the interest rate on investment, then what impact is has on the goods market and then you use the information plot the points to give you the IS-curve.
Questions about Deriving an IS-curve: Decrease in interest rate
Want more info about Deriving an IS-curve: Decrease in interest rate?
Get free advice from education experts and Noodle community members.