PA R T V I I Monetary Theory TA B L E - Effects from FactorsThat Shift the IS and LM Curves Factor Autonomous Change in Factor ,i + + Y Reason i C * Y ad * IS shifts right + + Consumer expenditure, C Response + LM1 i2 i1 IS2 IS1 Y1 Y2 ,i + + Y I * Y ad * IS shifts right + + Investment, I Y i + LM1 i2 i1 IS2 IS1 Y1 Y2 ,i + + Y G * Y ad * IS shifts right + + Government spending, G + Y i LM1 i2 i1 IS2 IS1 Y1 Y2 + Taxes, T Y +, i + T *C+*Y IS shifts left + ad +* Y i i1 i2 LM1 IS2 IS1 Y2 Y1 ,i + + Y NX * Y ad IS shifts right + + Net exports, NX + * Y i LM1 i2 i1 IS2 IS1 Y1 Y2 Y + + Money supply, M s ,i+ *i+* M LM shifts right s + i Y LM1 LM2 i1 i2 IS1 Y1 Y2 + Y +, i Md * i * LM shifts left + + Money demand, M d + 604 i Y LM2 LM1 i2 i1 IS1 Y2 Y1 Y Note: Only increases (,) in the factors are shown; the effect of decreases in the factors would be the opposite of those indicated in the Response column