Question

Explain how IS and LM curves are derived. What are the implications of IS and LM curves?

What are the factors on which the shape of the IS and LM curves depend?

08 Feb 2018
Answer :
Word Count : 819

Graphical Derivation of IS Curve

 

 

 

 

http://econ.tu.ac.th/ee312/islm/is06.jpg

http://econ.tu.ac.th/ee312/islm/is07.jpg
 

(a)

(d)
 

http://econ.tu.ac.th/ee312/islm/is08.jpg

http://econ.tu.ac.th/ee312/islm/is09.jpg
 

(b)

(c)

 

At interest rates r0 and r1, investment levels in panel (a) will be i0 and i1. To

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