Use the S-I model to illustrate and discuss the impact of a rise
in income ( Y ) on the economy; specifically on the real interest
rate, investment, savings, and consumption. Answer parts a) and b)
below:
a) Show the impact of the rise in income (rise in Y ) on S-I
diagram. Y ). Draw diagrams, label the figures, and clearly
illustrate the impact on each variable. LABEL THE AXES & the
CURVES!
b) NOW DISCUSS how the shock...