Macro Problem - Calculate the IS Curve & LM Curve Equations - Equilibrium Interest Rate & Output
In this problem, we're given equations that describe this economy, we're asked to explain each part of each equation, then derive the IS Curve and calculate the LM Curve. We graph the IS curve and LM curve diagrams. Then - using the IS and LM equations we just solved for - we find the equilibrium interest rate (r*) and real-income/real-output (Y*).
More Macroeconomics Problems: sites.google.com/site/curtisk...
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~ 1:19 a. Identify each of the variables and briefly explain their meanings
~ 5:43 b. From the above list, use the relevant set of equations to derive the IS curve. Graph the IS curve on an appropriately labeled graph.
~ 9:13 c. From the above list, use the relevant set of equations to derive the LM curve. Graph the LM curve on the same graph you used in part (b)
~ 10:30 d. What are the equilibrium level of income and equilibrium interest rate?
From Mankiw's Macroeconomics (8th ed) Aggregate Supply Part 1 (Chapter 11) Problem 6
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Very helpful! The fact that you aren't using a touch pen to write on the screen and draw terrible looking graphs makes you an absolute hero. This is a lot more visually appealing. Keep up the good work!
I have taken macro theory for 11 weeks, and your video finally made me understand how to do it all. Just in time for my final, Thank you!!
cheers better than my lectuerer
I was looking at loads of information to try and understand how to answer these types of questions for my econ exam and this video was the one where I finally got it. Thanks so much!
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Wonderful explanation, what my lecturer 'tried' to explain in 2 hours you explained it in the first 31 seconds, the rest just allowed me to fully understand the concept of IS-LM curves thank you! you should do more topics!!
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At 6:44 I was simplifying the expression. You'll notice that in the second line, there's a 120, a 0.5*(-40), a 100, and a 50, thus 120-20+100+50 = 250. To get the third line, we're just simplifying the expression by combining like terms.
@dancanonyango06
2 жыл бұрын
250+0.5y-10r. y=500-20r. How is that possible??
@ifeoluwapokolapo9693
2 жыл бұрын
@@dancanonyango06 (Make Y the subject) Y=250+0.5Y-10r, Y-0.5Y=250-10r 0.5Y=250-10r Y=500-20r
Thank you for explaining it so clearly. This was extremely helpful. My learning style must match your teaching style.
@economicurtis
10 жыл бұрын
Thank you!
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my instructor skip so many steps while explaining the formula, thats why I was so lose, now I get it. Thank you so much!!!
our lecturer never taught us like this thanks to u I get to know how to calculate I.S and L.M curve
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Thank you Sir 🙏
Kindly clarify as to which edition of Mankiw’s Macro Economics. Thanks
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Could you please show some numerical problems involving the open economy using is -LM model.
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how do u find price and intrest rate in the long run ? this is the short run right?
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Thanks!
@economicurtis
4 ай бұрын
Wow, that is too kind of you dinglebeey! My first super thanks
Thank youu
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real life saver 2021
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I have a problem that transaction demand for money and speculative demand for money has been given rather than M & P and the rest of the ques is same. How can I solve this?
Helpful video- thank you 🙏🏽 In a question where the inflation equals to its target 2% and real interest rate is also at 2% and output equals potential at that point. If real interest rate rose by 2% what’s the change in inflation? Also do central bank have to increase interest rate to take the economy back to equilibrium? If yes to what percent should the CB raise interest rates and how can the take the economy back to the 2% inflation target.
You are great
At 7:14 why do you double both sides?