Suppose the parameters of the IS curve are a = 0, b= 3/4, r = 3% and the real interest rate is initially R = 3%. Explain what happens to short-run output in each of the following scenarios (consider each separately). Be sure to provide a numerical result and justify your answer with the IS curve.
(a) The real interest rate falls from 3% to 1%.
(b) The real interest rate rises from 3% to 4%.
(c) ac increases by 2 percentage points.
(d) aim decreases by 4 percentage points.