mankiw9e_lecture_slides_chap12_Part 1 - Chapter 12/11...

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3/22/2016 1 Chapter 12/11 Aggregate Demand II: Applying the IS-LM Model Context Chapter 10 introduced the model of aggregate demand and supply. Chapter 11 developed the IS-LM model, the basis of the aggregate demand curve. IN THIS CHAPTER, YOU WILL LEARN: how to use the IS - LM model to analyze the effects of shocks, fiscal policy, and monetary policy how to derive the aggregate demand curve from the IS - LM model several theories about what caused the Great Depression 2