Consider Figure 11.8 below, which shows the output gap and the NASDAQ stock market index from 1995-2001. NASDAQ has a lot of "tech" firms that drove the rise in the stock market index in the late 1990s, as shown. As one can see, the output gap also rose to about 2.8 percent in April 2000. Explain this graph using the IS curve.Figure 11.8: Output Gap and NASDQ Index

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The Answer of Consider Figure 11.8 below, which shows the output gap and the NASDAQ stock market index from 1995-2001. NASDAQ has a lot of "tech" firms that drove the rise in the stock market index in the late 1990s, as shown. As one can see, the output gap also rose to about 2.8 percent in April 2000. Explain this graph using the IS curve.Figure 11.8: Output Gap and NASDQ Index