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IS-LM model - Interactions of real and monetary sectors
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Lecture notes on the IS-LM model. Outline: -Background info -IS curve -LM curve -Combining the IS-LM curves
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IS-LM model - Interactions of the real and monetary sectors
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13 Flashcards
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Flashcards
13 Flashcards
$3.86
0 sales
Some examples from this set of practice questions
1.
Is price considered fixed in the IS-LM model?
Answer: Yes. Changes in aggregate demand affect income.
2.
What does IS stand for?
Answer: Investment and Saving.
3.
What does LM stand for?
Answer: Liquidity preference and Money supply.
4.
What determines the slope of the IS cure?
Answer: Elasticity of investment with respect to the rate of interest. Income multiplier (marginal propensity to consume).
5.
Are r and Y positively related in the IS curve?
Answer: No. A negative relationship between r and Y exists in the IS curve.
6.
What determines the position of the IS curve?
Answer: -changes in AD not due to changes in r -expectations, confidence -fiscal policy changes in autonomous planned spending
7.
Is Money supply exogenous or endogenous in the LM curve?
Answer: Exogenous
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