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The course ‘Macroeconomics: The IS-LM Model’ will offer a detail outline of various components of an economy. It will also help understand the effects of various policy measures taken by governments and central banks on an economy.
The course is divided into four sections-
In section A, an overview of the economy with special reference to goods and asset markets will be presented to make the learners familiar with the components that constitute an economy. Different components of aggregate demand, determination of national income in the Keynesian framework, various motives for money demand, money supply and determination of interest rate in the money market will be discussed in detail.
Section B defines and derives both IS & LM curves and thereby introduces goods and money markets in technical way. It also explains the effects of possible changes in goods and money markets on IS and LM curve.
In section C, learners will be familiar with demand management policies and their effects on IS and LM curves.
And in the final section, that is, in section D, simultaneous equilibrium of an economy will be analysed along with the effects of fiscal and monetary policies that will equip the learners to evaluate the impacts of a particular policy measure on an economy and also make them able to formulate policy suggestions.Â
Section B
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1Introduction
Interdependence between goods and asset market
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2Overview of an Economy
Introduction to goods market and its components
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3Goods Market
Determination of equilibrium national income in the Keynesian model
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4Keynesian Model of Income Determination
Motives for money demand
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5Demand for Money
Motives for money demand
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6Money Market Equilibrium
Determination of interest rate in the money market
Section C
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7IS Curve: Definition
Defining ISÂ curve
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8Derivation of IS Curve
Derivation of IS curve from goods market
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9Shift in IS Curve
When does IS curve shift to right and when to left?
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10LM Curve: Definition
What does LM curve show?
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11Derivation of LM Curve
How can we derive the LM curve?
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12Shift in LM Curve
When does LM shift to left and when to right?
Section D
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13Introduction to Demand Management Policies
What is meant by Demand Management Policy?
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14Fiscal & Monetary Policies
Fiscal & Monetary Policies with their instruments
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15Effects of Fiscal Policy on IS Curve
Fiscal policy and its effect on IS curve
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16Monetary Policy and Interest rate Determination
Role of monetary policy in determining interest rate
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17Effect of Monetary Policy on LM Curve
Monetary policy and its effects on LM curve