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About IS-LM Model - Close and Open Economy - Class 17&20 PDF
The document discusses the IS-LM model. 1) It introduces the IS curve, which shows the combinations of income and interest rates where the goods market is in equilibrium. The IS curve is derived from the relationship between investment and savings. 2) It then introduces the LM curve, which shows the combinations of income and interest rates where the money market is in equilibrium. The LM curve is derived from the relationship between the demand and supply of money. 3) It explains that the simultaneous equilibrium in the goods and money markets occurs at the point where the IS and LM curves intersect. This point represents the equilibrium levels of income and interest rates.
Detailed Information
| Author: | ['Debabratta'] |
|---|---|
| Publication Year: | 2016 |
| Pages: | 8 |
| Language: | English |
| Format: | |
| Price: | FREE |
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