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3 Cards in this Set
- Front
- Back
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What are the IS/LM Model Assumptions?
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1) Investment will now be endogenous
2) Investment is determined by: -Interest rate -Level of Sales/ Level of Increase in Y 3) I = I(Y,i) |
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What is our formula for the IS/LM model?
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Y=C(Y-T)+I(Y,i)+G
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What are the axis for the IS/LM Model?
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Y-axis= Y,Z
X-axis= Y 45 degree ZZ (PRODUCTION) line |
