Explain about IS-LM-model, Macroeconomics

Assignment Help:

Q. Explain about IS-LM-model?

The key difference between the IS-LM model and the cross model is that nominal interest rate is exogenous in cross model on the other handit is endogenous in the IS-LM model. Now we will explain how the nominal interest rate is determined in the IS-LM.

P remains constant and exogenous in the IS-LM model. Consequently, inflation and expected inflation is zero. This in turn suggests that the nominal interest rate is equal to the real interest rate: R = r. This will allow us to talk about "the interest rate" without specifying whether we mean the real or nominal interest rates.


Related Discussions:- Explain about IS-LM-model

Demographics of the customers, A firm conducted a research about the demogr...

A firm conducted a research about the demographics of their customers. For the study they collected data about the following variables: gender, marital status, credit rating (low,

Describe the relation of money with wealth and income, Describe the relatio...

Describe the relation of money with wealth and income It is very possible to have a high income but no money and no wealth, or to be very wealthy and have a lot of money but no

Circula flow of economic, list and discuss the major markets and four agent...

list and discuss the major markets and four agents in the circular flow economic?

Sustainability of current account deficit, Sustainability of Current Accoun...

Sustainability of Current Account Deficit: Theoretically speaking, a current account deficit can be sustained as long as the growth rate of national income exceeds the rate of

Money multiplier, what is money multiplier? what is role , importance, adva...

what is money multiplier? what is role , importance, advantages , disadvantages , limitations and examples of money multiplier?

Calculate tax equilibrium quantity, 1. Consider two projects.  The fir...

1. Consider two projects.  The first project pays benefits of $90 today and nothing else.  The second project pays nothing today, nothing one year from now, but $100 two

Robert''s new way vacuum cleane, Robert's New Way Vacuum Cleaner Company is...

Robert's New Way Vacuum Cleaner Company is a newly started small business that produces vacuum cleaners and belongs to a monopolistically competitive market. Its demand curve for t

Enumerate the categories of firms in the circular flow, Firms in the circul...

Firms in the circular flow We divide all firms into 3 categories: F R comprises all firms which acquire raw material (farm products, iron ore and so on), F H all those that p

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd