Understanding the IS-LM Model: Equilibrium in Goods and Money Markets

Jan 05, 2026

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Chapter 21 delves into the IS-LM model, a fundamental framework in macroeconomics that illustrates the interaction between the goods market (IS curve) and the money market (LM curve). It explores the conditions for equilibrium, how shifts in these curves can impact output and interest rates, and the policy implications for fiscal and monetary interventions. The chapter provides a thorough analysis of how these two markets converge to establish overall economic equilibrium, making it essential for students and economists alike.

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Understanding the IS-LM Model: Equilibrium in Goods and Money Markets

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