MGEB06H3 Chapter : Week 8 chapter notes
6 Dec 2010
School
Department
Course
Professor
Document Summary
Chapter 10 aggregate demand i: building the is-lm model notes. Is-lm model a model of aggregate demand that shows what determines aggregate income for a given price level by analyzing the interaction between the goods market and the money market. Is curve negative relationship between interest rate and the level of income that arises in the market for goods and services. Lm curve the positive relationship between the interest rate and the level of income (while holding the price level fixed) that arises in the market for real money balances. Is stands for investment and saving , and the is curve represents what"s going on in the market for goods and services. Lm stands for liquidity and money , and the lm curve represents what"s happening to the supply and demand for money. 10. 1 the goods market and the is curve.
