1. Explain why the IS schedule in the IS LM model is negatively sloped and the LM schedule is positively sloped. 2. What factors determine the magnitude of the slope of the IS schedule? That is,...

1. Explain why the IS schedule in the IS – LM model is negatively sloped and the LM schedule is positively sloped.

2. What factors determine the magnitude of the slope of the IS schedule? That is, what factors determine whether the schedule is steep or flat?