Derive the IS curve from Savings-Investment figure. Explain all the steps.

Show using the IS-LM figure what happens to real interest rate, output and prices in each of the following scenarios in the short-run and the long-run.

Real money supply increases

A temporary increase in government purchases for military purposes. Will it matter whether the temporary increase in military spending is funded by taxes or by borrowing?

Answer rating: 100% (QA)

This IS derived curve shows all the combinations of income termed as Y while the real interest rate ... View the full answer