Introduction to IS-LM Model Flashcards
1
Q
What is the equilibrium condition?
A
2
Q
What is the equation for private saving?
A
S=Y-T-C
3
Q
How can the equilibrium condition be rewritten in terms of investment and saving?
A
4
Q
What two equations can be used to show equlibrium in the goids market?
A
1) Y = C + I + G
2) I = S + (T - G)
5
Q
What is the investment function?
A
6
Q
What does the equilibrium condition in the goods market become, when taking the investment relation into account?
A
7
Q
What is the LM relation?
A
The real supply of money = The real money demand
8
Q
What is the IS relation?
A
