For the same reason, we draw the IS curve as a concave function: the lower the interest rate is, the smaller the effects of interest rate changes are on investment and output, and so the steeper the IS curve is. Now consider two cases. In the first case, the government decides to pursue fiscal expansion.
This leads to an increase in aggregate demand, as reflected by a rightward shift of the IS curve. The new IS curve is the yellow dotted line called IS prime. This pushes the economy away from the effective lower bound. The rise in aggregate demand drives up the interest rate.