Lecture_7.pdf - Lecture 5 IS-LM Model(Theory and Applications Dozie Okoye Dalhousie University Winter 2019 Learning Goals The IS Curve The LM Curve

Lecture_7.pdf - Lecture 5 IS-LM Model(Theory and...

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Lecture 5: IS-LM Model (Theory and Applications) Dozie Okoye Dalhousie University Winter 2019
Learning Goals The IS Curve The LM Curve Short-Run Equilibrium: The IS-LM Model Applying the IS-LM Model Stabilization Policy Background: The Depression Unemployment in the Depression: Economics 2201 Lecture 5: IS-LM Model (Theory and Applications)
Learning Goals The IS Curve The LM Curve Short-Run Equilibrium: The IS-LM Model Applying the IS-LM Model Stabilization Policy Background: Keynes Economics 2201 Lecture 5: IS-LM Model (Theory and Applications)
Learning Goals The IS Curve The LM Curve Short-Run Equilibrium: The IS-LM Model Applying the IS-LM Model Stabilization Policy Background: Keynes According to Keynes: I shall argue that the postulates of the classical theory are applicable to a special case only and not to the general case, the situation which it assumes being a limiting point of the possible positions of equilibrium. Moreover, the characteristics of the special case assumed by the classical theory happen not to be those of the economic society which we actually live, with the result that its teaching is misleading and disastrous if we attempt to apply it to the facts of experience . Economics 2201 Lecture 5: IS-LM Model (Theory and Applications)
Learning Goals The IS Curve The LM Curve Short-Run Equilibrium: The IS-LM Model Applying the IS-LM Model Stabilization Policy Goals At the end of this lecture, we should: I Describe how national income (AD) is determined in the short run I Explain how the goods and financial markets interact to determine demand and income in the short run I Understand the variables that shift the AD curve and why I Fully illustrate how monetary and fiscal policies influence aggregate demand Economics 2201 Lecture 5: IS-LM Model (Theory and Applications)
Learning Goals The IS Curve The LM Curve Short-Run Equilibrium: The IS-LM Model Applying the IS-LM Model Stabilization Policy The Keynesian Cross Interest, Investment and the IS Curve The IS Curve The IS curve shows the relationship between the interest rate and income in the market for goods and services IS stands for Investment-Saving Economics 2201 Lecture 5: IS-LM Model (Theory and Applications)
Learning Goals The IS Curve The LM Curve Short-Run Equilibrium: The IS-LM Model Applying the IS-LM Model Stabilization Policy The Keynesian Cross Interest, Investment and the IS Curve The Keynesian Cross and Expenditure In the short run, income is determined by desire to spend Spending is done by: I Households I Firms I Governments Economics 2201 Lecture 5: IS-LM Model (Theory and Applications)
Learning Goals The IS Curve The LM Curve Short-Run Equilibrium: The IS-LM Model Applying the IS-LM Model Stabilization Policy The Keynesian Cross Interest, Investment and the IS Curve Planned and Actual Expenditure Planned expenditure is the desired level of expenditure Actual expenditure is the level of expenditure (output) The Keynesian Cross shows us how planned expenditure equals actual expenditure Economics 2201 Lecture 5: IS-LM Model (Theory and Applications)

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