Scribd Logo
Upload

Welcome to Scribd!

  • Govt. Exp. Eqululunw T, Y+ Lgot +lea: (61 2 Dem MD

    Uploaded by

    Shrujanam Syama
    17 views6 pages
    This document presents a model of the monetary system using the IS-LM framework. It shows the relationship between aggregate demand (AD), interest rates (i), nominal GDP (Y), the money supply (Ms), and money demand (Md). The model demonstrates how fiscal and monetary policy can be used to achieve equilibrium in the money market by shifting the IS and LM curves. Changes in government spending, taxes, or the money supply will impact AD and i, changing the point where IS and LM intersect and thereby influencing Y.

    Original Description:

    Macroeconomics basics

    Original Title

    4

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    This document presents a model of the monetary system using the IS-LM framework. It shows the relationship between aggregate demand (AD), interest rates (i), nominal GDP (Y), the money supply (Ms), and money demand (Md). The model demonstrates how fiscal and monetary policy can be used to achieve equilibrium in the money market by shifting the IS and LM curves. Changes in government spending, taxes, or the money supply will impact AD and i, changing the point where IS and LM intersect and thereby influencing Y.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    17 views6 pages

    Govt. Exp. Eqululunw T, Y+ Lgot +lea: (61 2 Dem MD

    Uploaded by

    Shrujanam Syama
    This document presents a model of the monetary system using the IS-LM framework. It shows the relationship between aggregate demand (AD), interest rates (i), nominal GDP (Y), the money supply (Ms), and money demand (Md). The model demonstrates how fiscal and monetary policy can be used to achieve equilibrium in the money market by shifting the IS and LM curves. Changes in government spending, taxes, or the money supply will impact AD and i, changing the point where IS and LM intersect and thereby influencing Y.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 6

    Examble AG>8 , 2 COM Z= + I+4

    44
    Yg A/)
    -G1
    tr= ty
    T t.Y
    6046,1)
    o4t4
    (61
    Govt. Exp. 2 Dem md
    Eqululunw
    K Muttihdow
    -61 tI +4
    6ot+6,#(y- t,Y+ tr)
    y
    Examle AYI=loo
    Peubn 1
    LGot 6,t +I +4J +lEA AG(4-t)

    58
    A
    A6 6, xiod =0.SXi0o uhy
    At61-+) y
    AY2 So Peuon Az
    AG20.5XSo 2 5
    X, 6, (1-t)
    - Toum 3
    Az
    A325
    -
    o.5 (e.s) ( leo) z A z t 6-t)Y
    A30.Sx25 Case 1-

    &Aead advod
    til unil
    Aulgmalib Stabulua
    AY A4+ 6,4G j A4*
    AG+ &1+ 6f+
    AY L
    A AG
    7/22031 Y- A- bu) sutbly Z A-bi
    Gan 3 to-t)»
    6ot 6 Yp
    T tY

    tx ty
    I ICi) =

    Comstant 0
    (Tual
    Gabhurally 22A-t2

    I-T ikio Aulouwmsuk ImeTimen


    2A-bi
    b Semululy Pao Pauomatuy +o-EY

    =b

    ZGe+-+.y4 Er) +4 +I -bi


    orc.tT +7++, (1-t)y -b
    As
    =A +6, C1-t)y- bi = Y

    x £A-bLJ
    A-b
    I-,C1-t) -GCIt)

    IS
    Ncte Bodyal dunplun
    1 Euy Pamt on IS uw sLgmku am epudlulm
    BS =Tax 4tr
    &. whmm h t ral aAok dauuwn Inuodmev is p0uldp i mh0lad
    tY-4-tr Ovn Cat

    Balaneud, Budget Multihli


    3,Chome im A Shute IS.
    Conmuilam blw BC amd Fisal polup
    ExA4>o
    AAO 83e 0h4

    AA 2 A
    *)y=x [A-bL
    Con Stamb

    r) MavwhstPauo Monuy Mawht kou Lugudly


    oney Luauddly
    No uwme
    Govt. Eondlu

    nteust At >(at hkdinq l9juudh møry,


    IS2

    2 tahun. inte wnudu lon

    LELY) hy - RL
    h0Anulikuulyo pakameluu Aelatiovy bfw 2Y pusm LM mauhe

    LM L[hY-ms
    Sumly Ms Nomunal Morly &unhly

    Centrak MS ab mony auhhlu


    Kame

    At eguhduum demamd duyly


    hY- = MS

    hY- 4rapheoluy

    MS
    -2

    LM
    Aab
    Balae

    LYau pcalualp Rialld


    Hw aualitoluuly unduwtands why
    hY Aeo
    Balames mayd
    LEuhUn i=o 1, Ew poUni
    m M 2heuOHeril equlbuUM 1n monay

    , Moru, óupaly ohangs shut LM


    )IS-LM Frame0uhI
    Ex Ms MS
    AM O
    Eaalubaunmw LM
    Maukut o4 Monty bothgod
    MBUy malh

    IS

    Ms M2 I S Y«A -bl]
    P Balarto
    M : hY-M
    LM
    LM Solve

    1 + h ))=
    *A
    +bx
    xAA+«bMS
    P LAY-E
    ht d bh

    = A Kb MS

    whuu& A
    R+ bh
    AJou, P is no tongby a DYM Stami Fiscolb Montouy Polay Imbate
    y 8A+8b MS AD-Hlationehps Hawto amolyas
    P
    Iduithy tho
    vaualle thot is shamging
    Steh L
    P
    wuthy it is in guode
    Dermdamg ou th, dud
    mht. mtt
    auy momy
    Hir
    mkt. 2 dolimims th 1mbac
    Step2: Tab +hat cou

    shamb
    AD
    LoOAMUm 18-LM kuomitsouk.
    in
    G1ahenll Step3 Tah tu haumry 2 ohfly
    MefaE
    onY2u.
    P P tmpact
    Ma
    Analye + h ttab
    easmng,BAD-AS
    unuuouk
    7Tahe this
    Step :
    Y LP
    mpant ovm

    MS
    Balameg
    Y &

    You might also like