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Use the Keynesian cross or the loanable funds market to derive the IS curve. Why is the good market in equilibrium when investment equals savings?
Use the Keynesian cross or the loanable funds market to derive the IS curve. Why is the good market in equilibrium when investment equals savings? Discuss how fiscal policy shifts the IS curve. Why does the IS curve shift?
Use the money market diagram to derive the LM-curve. Discuss how monetary policy shifts the LM curve.
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