Goods and financial markets: the IS-LM model
4 important questions on Goods and financial markets: the IS-LM model
On which two factors does investment depend?
2. Interest rate, higher rates means decrease in investment
Fiscal contraction/consolidation
What are 3 results of fiscal contraction?
2. NO effect on LM
3. New equilibrium on LM, output and interest rate decreases
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Monetary contraction/tightening
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