I love you man! people like you make life easier :) may God bless you and help you as well.
@lostmy1
11 жыл бұрын
When the increase in the demand for money is due to an increase in the the level of income (which increases the demand for transaction balances) a movment along the LM curve takes places. This is the endogenous part. The LM curve only shifts if exogenous factors such as a change in money supply.
@mediafredi3823
3 жыл бұрын
Thanks for this video, it really helped me to ace my economics exam today :)
@sadykgaybullaev3685
5 жыл бұрын
Brilliant work!
@lostmy1
12 жыл бұрын
As output increases there is an increase in economic transactions and economic particpants therefore require more money to finance these transactions. The more the consumers buys and the more the firms produce the more money is needed.
@lostmy1
12 жыл бұрын
If the increase in investment is due to exogenous factors such as expectations, regulations, social unrest, politcial change, etc. then it shifts the IS Curve. If investment changes due to a change in the interest rate then a movement along the IS curve occurs. See the derivation of the IS curve.
@lostmy1
12 жыл бұрын
@petermayhew199218 Good point but in the ISLM model the price level is regarded as fixed. Which is not an unrealistice assumtption given the world we find ourselves in today. So an increase in governemnt spending does not lead to the decline in investment.
@btddck1310
5 жыл бұрын
You r a life saver. Thank you for your clear explanations:)
@lostmy1
13 жыл бұрын
In equilibrium people are holding the amount of money and bonds they wish at the equillibrium interest rate. As output and income rise a need for more money to do transactions arises. To get hold of this money some particpants will sell bonds and in excahnge receives money. In this process the price of bonds decreases since the supply of bonds increased and in the process the interest rate declines. And at the lower interest rate people are willing to hold less passive money.
@Nerdbasher11
6 жыл бұрын
Whats happens to the IS-LM model if policy makers were to reduce taxes? Shift is the IS right?
@jezuik
12 жыл бұрын
this helped alot with the econ course i am in right now, thank you
@lostmy1
12 жыл бұрын
@diamondlyrgirl5 The sell bonds to get hold of money - that is what an increase in money menas. As the supply of bonds increases the price thereoff decrease.
@codesnippet7375
9 жыл бұрын
what happens to IS-LM curve when there is a rise in income tax rates on income, interest rate and investment.
@Samir016
12 жыл бұрын
I love this guy!
@mohammedalbahrani8717
4 жыл бұрын
how wach this in 2019
@5amwong
11 жыл бұрын
Thank you
@Eviinas
12 жыл бұрын
You are awesome, this helped me so much!
@raffi3o3
7 жыл бұрын
very well explained
@lostmy1
11 жыл бұрын
See the derivation of the LM curve.
@jamilkhankhattak
7 жыл бұрын
I increases due to increase in Y. Later I decreases due to increase in intrst rate. u said the net effect is unknwn. May i ask whether the multiplier effect wd be higher in d first round and lesser in the second round.............. or not. plz rply
@winnd4spd
12 жыл бұрын
Hello Sir, I would like to ask you a question. In another section, you mentioned that changing in investment (I) will shift the IS curve. However, in this section you said that it is moving a long the IS curve when I decrease. Thus, I am a bit confused which one is the correct one? Please advice
@5amwong
11 жыл бұрын
Hi, Does the increase in demand for money not then shift the LM curve to the right?
@RazEitanCoocks
10 жыл бұрын
Hi, your videos were perfect before you started shooting from different angles and editing. This "sophisticated" filming makes it a lot more difficult to look at a graph and follow an explanation.
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