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IS-LM model: Derivation of an IS curve
Автор: Bernard
Загружено: 2010-06-05
Просмотров: 157065
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Graphical derivation of an IS curve
In this video clip the IS curve is derived using a numerical example. It is assumed that a decrease in the interest rate from 10% to 8% increases investment spending by 50. In the goods market diagram this increases the vertical intercept by 50 and given a multiplier of 5 the increase in the equilibrium income is 250 (from 1500 to 1750). From this information an IS curve can be plotted showing combinations of the interest rate and level of output where the goods market is in equilibrium
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