Question: using either the keynesian cross model or the market for...
Using either the Keynesian cross model or the market for real money balances (whichever one is appropriate), please illustrate what happens under the following circumstance. Then illustrate what happens using the IS-LM model. *Note: please place the graphs side-by-side. Finally, comment on what happens to income/output and the interest rate.
A. Business confidence rises and as a result, investment in capital goods increases.