ISLM
100

Several large multinational companies buy new factories inside the country.

r ↑ Y ↑

200

A country sees a massive growth in the expected return on stoves and other important food service appliances, rising past the interest rate. All the restaurants in the country see this opportunity and buy more stoves.

r ↑ Y ↑

300

An economy experiences a massive negative supply shock raising prices.

r↑, Y↓

400

The Fed decreases the reserve ratio.

r ↓ Y↑

500

The government decides to cut taxes and also cancels funding on several major conservation projects.

indeterminate

M
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