TOPIC: IS-LM MODEL by Umer shah Lecture :1 Prepared by shahumer Email :
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👉 Money market or ASSET market 👉 AD = C+ I Consumption demand & Investment demand ⬇️ ⬇️ ⬇️ ⬇️ Propensity to consume Income. Rot MEC Prepared by shahumer Email :
[email protected] Equilibrium condition in goods Market => Y= C+I+G =>Y= ¢°+ b(Yd)+ I +G =>Y= ¢°+b[Y-T+R] + I + G => Y =¢° +b[Y-(T° +tY)+R]+I+G° =>Y=¢°+ bY-bT°-btY + bR° + I + G° =>Y=¢°+ bY-bT°-btY + bR° + I°- di + G° => Y =A° + bY-btY-di => Y-bY + btY = A° - di => Y(1-b + bt) = A° - di => Y =(A°-di)/(1-b + bt) ➡️ IS equation => Y = [A°-di] @ Prepared by shahumer Email :
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