Monetary And Fiscal Policy In The Islm Model561

Preview 561

Factors That Cause the IS Curve to Shift 561

Factors That Cause the LM Curve to Shift 564

Changes in Equilibrium Level of the Interest Rate and Aggregate Output 566

Response to a Change in Monetary Policy 566

Response to a Change in Fiscal Policy 567

Effectiveness of Monetary Versus Fiscal Policy 568

Monetary Policy Versus Fiscal Policy: The Case of Complete Crowding Out 568

Application Targeting Money Supply Versus Interest Rates 571

ISLM Model in the Long Run 575

ISLM Model and the Aggregate Demand Curve 577

Deriving the Aggregate Demand Curve 577

Factors That Cause the Aggregate Demand Curve to Shift 578

Summary, Key Terms, Questions and Problems, and Web Exercises 580

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