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the slope of IS curve and its policy implications

the slope of IS curve and its policy implications. r. the smaller the elasticity of investment. IS curve. I. Y. the steeper the IS curve. S. r. the greater the elasticity of investment. IS curve. I. Y. the flatter the IS curve. S. r. the larger the marginal propensity to save.

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the slope of IS curve and its policy implications

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  1. the slope of IS curve and its policy implications

  2. r the smaller the elasticity of investment IS curve I Y the steeper the IS curve S

  3. r the greater the elasticity of investment IS curve I Y the flatter the IS curve S

  4. r the larger the marginal propensity to save IS curve I Y the steeper the IS curve S

  5. r the smaller the marginal propensity to save IS curve I Y the flatter the IS curve S

  6. Policy Implications

  7. Policy Implication: a steeper IS curve(expansionary monetary policy) LM r LM’ IS Y Y1 Y2

  8. Policy Implication: a flatter IS curve(expansionary monetary policy) LM r LM’ IS Y Y1 Y2

  9. Policy Implication: a steeper IS curve(expansionary fiscal policy) LM r IS2 IS1 Y Y1 Y2

  10. Policy Implication: a steeper IS curve(expansionary fiscal policy) LM r IS2 IS1 Y Y1 Y2

  11. the slope of LM curve and its policy implications

  12. LM curve the smaller the interest elasticity of money demand r Ma Y 450 the steeper the LM curve Mt

  13. the larger the interest elasticity of money demand r LM curve Ma Y 450 the flatter the LM curve Mt

  14. the larger the income elasticity of money demand r LM curve Ma Y the steeper the LM curve 450 Mt

  15. the smaller the income elasticity of money demand r LM curve Ma Y 450 the flatter the LM curve Mt

  16. Policy Implications

  17. Policy Implication: a steeper LM curve(expansionary monetary policy) LM r LM’ IS Y Y1 Y2

  18. Policy Implication: a flatter LM curve(expansionary monetary policy) LM r LM’ IS Y Y1 Y2

  19. Policy Implication: a steeper LM curve(expansionary fiscal policy) LM r IS’ IS Y Y1 Y2

  20. Policy Implication: a steeper LM curve(expansionary fiscal policy) LM r IS’ IS Y Y1 Y2

  21. Extreme Cases

  22. A vertical IS curve monetary policy r IS LM LM’ Y

  23. A vertical IS curve fiscal policy IS IS’ r LM no crowding out effect Y Y1 Y2

  24. A vertical LM curve LM LM r monetary policy IS Y Y1 Y2

  25. A vertical LM curve LM r fiscal policy IS’ IS Y

  26. A horizontal IS curve LM r LM’ IS monetary policy Y Y1 Y2

  27. A horizontal LM curve r fiscal policy LM IS’ IS Y Y1 Y2

  28. AL 96/7 IS2 LM2 IS1 IS3 LM1 Y Y*

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