Fantasy
Global “Minimalist” Movement: Cultural shift due to social media trend causes EVERYONE to find minimalism aesthetic.
IS curve shifts left --> interest rate and output decrease
A major oil-producing region sharply restricts exports, causing energy prices to spike globally
LM goes up
IS goes left
interest rate down
A magic vault opens that doubles the amount of cash circulating in the economy
LM down and IS curve moves right
output rises
The interest rate might decrease depending on how much the IS curve shifts
The country is a decentralized pastoral-nomadic society where everyone is constantly moving and people don’t have time to settle down.
IS shift left
interest rate goes down and output down
A global sleep spell makes every household sleep for a month (hint: it cancels shopping trips!)
IS goes left - interest rates decrease and output decrease
After a major war ends, millions of soldiers return and form households, creating a boom in housing construction
IS to right
interest and output increase
Thanos snaps and half the population disappears
IS Curve shifts left & LM shifts down - interest rate decrease
Papa’s Pizzeria takes over the economy and has a monopoly over the food industry
(Because C decreases and I decreases as ppl starve <3) Reduces output → GDP ↓
IS curve shifts left
interest and output down
Total elimination of income tax
IS curve shifts slightly right due to increase in C & I.
interest and output decrease
paper can no longer be produced (so no more cash) - immediate effect
Money supply falls (Ms ↓)
So interest goes up
LM curve goes up
Monopoly of paper Reduces output → GDP ↓
IS curve shifts left
output decrease