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The IS–LM model, or Hicks–Hansen model, is a two-dimensional macroeconomic model which is used as a pedagogical tool in macroeconomic teaching. The IS–LM model shows the relationship between interest rates and output in the short run in a closed economy.
Apr 15, 2024 · The IS-LM model, which stands for “investment-saving” (IS) and “liquidity preference-money supply” (LM), is a Keynesian macroeconomic model that shows how the market for economic...
The basis of the IS-LM model is an analysis of the money market and an analysis of the goods market, which together determine the equilibrium levels of interest rates and output in the economy, given prices.
Jan 30, 2023 · key takeaways. The IS curve shows the points at which the quantity of goods supplied equals those demanded. On a graph with interest (i) on the vertical axis and aggregate output (Y) on the horizontal axis, the IS curve slopes downward because, as the interest rate increases, key components of Y, I and NX, decrease.
Keynesian cross. Details on shifting aggregate planned expenditures. Keynesian cross and the multiplier. The expenditure-output, or Keynesian cross, model. IS-LM. Learn. Investment and real interest rates. Connecting the keynesian cross to the IS curve. Loanable funds interpretation of IS curve. LM part of the IS-LM model.
Dec 14, 2016 · The IS–LM model is a short-run macroeconomic analytical construct for studying an economy with idle productive resources. In the form exposed by Hansen ( 1949 ), it is a two-dimensional diagram with the abscissa measuring real income and the ordinate the real interest rate.
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