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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.
- IS/LM model - Simple English Wikipedia, the free encyclopedia
From Simple English Wikipedia, the free encyclopedia. The...
- Mundell–Fleming model - Wikipedia
The Mundell–Fleming model, also known as the IS-LM-BoP model...
- IS/LM model - Simple English Wikipedia, the free encyclopedia
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 IS-LM model modified for endogenous money: The central bank controls interest rates but not the money supply. The LM curve is now flat, since, when the money supply increases, the interest rate r does not move. Income Y increases from ya to yb without any rise in interest rates
Aug 16, 2017 · The IS-LM model stands for "Investment / Savings Equilibrium" and "Liquidity Demand / Money Supply Equilibrium." These are two different curves, as we will see in moment, that represent a relationship between the goods market and the financial market.
LM represents the price (in interest rate) that entrepreneurs are willing to pay in order to acquire capital to invest in a project. As the economy improves, there is more of a reason to engage in new entrepreneurial activities, so ceteris paribus they would be willing to pay more then.
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