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

Health care and income transfers, During the past five decades, there has b...

During the past five decades, there has been a shift in the composition of the federal budget toward more spending on income transfers and health care and a smaller share for natio

Classical model, using a graph of the classical labour market,illustrate th...

using a graph of the classical labour market,illustrate the effects of a real wage existing in the market that is lower than the equilibrium real wage.What will eventually happen i

Indifference curve., what is lemda in marginal utility. And how does it af...

what is lemda in marginal utility. And how does it affect the consumption

Elucidate how the two bonds differ, Consider two bonds. Each has a face val...

Consider two bonds. Each has a face value of $100 and matures in one year. One has a zero coupon payment, and the other pays $10 per year. A. Explain how the two bonds differ

Illusrtate the equilibrium point, QXd = 14 - (1/2)PX and QXs = (1/4)PX - 1 ...

QXd = 14 - (1/2)PX and QXs = (1/4)PX - 1 Instructions: Round your answers to the nearest whole number. a. Determine the equilibrium price and quantity. Show the equilibrium g

• What are the main goods and services the United States tra, I am working ...

I am working on a project for my class and this week discussion is on international trade and exports. what I am needing is the information for the 1970s

Cost of raw materials annually, If you have $10,000 to start a lawn-cutting...

If you have $10,000 to start a lawn-cutting business, the interest rate is 6 percent, your annual cost of raw materials are $4,000, and the earnings you sacrifice from working at a

Aggregate consumption, Aggregate Consumption   This is the aggregate of ...

Aggregate Consumption   This is the aggregate of all expenditures on current consumption goods and services i.e. those which are consumed during the period. Living standards are

Which of the following statements is correct, Which of the following statem...

Which of the following statements is true? a. economic profit equals accounting profit minus implicit costs b. the short run is any period of time in which there is at least

Determine the optimum prices and outputs-probability, Given the following: ...

Given the following: Airbus Boeing Demand P = 182.868 - 0.0003Q P = 198.6592 - 0.00013Q TVC Curve TVC = 104.8822Q - 0.001Q^2 + 0.09Q^3 TVC = 25.8678Q - 0.00023Q^2 + 0.4Q^3 In

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