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

Firms use crowd sourcing technique, Thread less is an example of a firm bui...

Thread less is an example of a firm building on its customer base to use new products and also to participate in the design and vetting of popular designs. In the summer of 2010, D

Calculate variable unit costs and total annual costs, How do you calculate ...

How do you calculate variable unit costs and total annual costs? Ans) Annual units sold, 1000. Raw materials yearly cost 650. Building rent yearly cost 9000. If sales volume enh

How to find nominal gdp in the current year, Consider an economy that produ...

Consider an economy that produces only three types of fruit: apples, oranges & bananas. In the base year the production & price data are as follows: Fruit

frame work, Hello sir, madam... I am hassan PHD student. I''m lost to get...

Hello sir, madam... I am hassan PHD student. I''m lost to get a good frame work of my thesis about e government and economic growth. and I need to know how to measure the variable

Money, determinants of money supply

determinants of money supply

Find real interest rate and nominal interest rate, #questionAssume that an ...

#questionAssume that an economy''s GDP Y=5000. Also assume that the government runs a deficit where tax revenue T=1000 and government expendituresG= 1500. The consumption function

What do you mean by exchange rate, Q. What do you mean by Exchange rate? ...

Q. What do you mean by Exchange rate? Exchange rate is defined as the price of one unit of currency in terms of another currency. If one euro costs 1.5 USD then 1 USD costs 1/1

Expenditure methods, Expenditure method is also called Flow-of-Expenditure ...

Expenditure method is also called Flow-of-Expenditure method, consumption and investment method, income Disposal method, etc. Expenditure method measures the final expenditure

Classical quantity theories, Classical Quantity Theories Quantity theor...

Classical Quantity Theories Quantity theories have had a long history and a widespread use in economics. As originally formulated these were not explicitly designed as theories

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