$8$

Two interpretations of the $\frac{?}{S}-LM$ model are that the model explains:

a$.$ changes in government spending and taxes or the determination of the supply of real money balances.

b$.$ the short$-$run quantity theory of income or the short$-$run Fisher effect.

c$.$ the determination of income in the short run when prices are fixed or what shifts the aggregate demand curve.

d$.$ the determination of investment and saving or what shifts the liquidity preference schedule.