Econ110BW11 - Lec3 A - GR_ol

Econ110BW11 - Lec3 A - GR_ol - Macroeconomics B Econ 110B...

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Macroeconomics B Econ 110B–Winter 2011 Prof. Giacomo Rondina Lecture 3
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The IS Equation: Equilibrium in Market for Goods Supply of Goods (Output) S Y Demand for Goods IS C Y T I Y i G ++ : Income of Agents I Y Equilibrium in Market for Goods (Demand=Supply) ( ) ( ) , ZC S ZY = 2 Expectations: the Basic Tools (Ch. 14)
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The IS Equation: Equilibrium in Market for Goods () ( ) :, ZZ Z C Y T I Y i G = −+ + ( ) ': , ' ' ZZ Z C Y T I Y i G i i = + > : A ZZ Y = ' A ZZ Y = 3 Expectations: the Basic Tools (Ch. 14)
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The LM Equation: Equilibrium in the Market for Money Supply of Money S M Demand for Money ( ) d M PYL i = i : Opportunity Cost of Holding Money Equilibrium in Market for Money (Demand=Supply) ( ) : Price Level : Real Income : Liquidity Preference PY L i dS M M = ( ) M = ( ) or M YL i P = M 4 Expectations: the Basic Tools (Ch. 14) : Real Money Balance P
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The LM Equation: Equilibrium in the Market for Money () : d d M M YL i P = d : d d M M Y Y P => d : Sd MM A P P = : M M A P P = 5 Expectations: the Basic Tools (Ch. 14)
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IS LM: Equilibrium in Market for Goods and Market for Money A: income Y
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This note was uploaded on 01/18/2012 for the course ECON 101 taught by Professor Bansak during the Summer '07 term at San Diego State.

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Econ110BW11 - Lec3 A - GR_ol - Macroeconomics B Econ 110B...

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