IS-LM model: Derivation of an IS curve

[lostmy1]

Yes we assume it is 5 and therefore the equilibrium income is 5 x 300 = 1500.

[quinnguyenvn]

why Y= 1500. is multify 5 just an assumsion?

[EternalTempest]

He put 300 on the y axis because ZZ = C (consumption) + I (Investment, in this case 150) + Government spending.

Investment at 10% is 150, i'm assuming the other 150, comes from consumption and govt. spending.

Correct me if i'm wrong!

[lostmy1]

@EternalTempest You are right. The vertical intercept consists of autonomous C + autonomous G + investment. The other 150 is then made up of C + G.

[knallbirne3000]

den becent

[lostmy1]

Why 150?

[mattrgreenwell]

why did he put 300 on y axis?????? should it of been 150?

[imperator1911]

@mattrgreenwell 300 is the sum of Investment (150), private and public consumption: the value of 300 is arbitrary (as it is I=150), it must just be > I.

[mattrgreenwell]

you did he pu 300 on y axis?

[ntskl]

Thanks so much! Found your excellent videos just in time for finals.

[michaelgrafman]

@ntskl same here

[AudiROCKS]

The only thing which frustrates me with economics is the use of notation. For example here small i= interest rates whereas my professor uses r= interest rates. Of course if you know how the model works you also know what the axis stand for, its just confusing when you have to learn how all the different models work.

[kingofhills88]

One question, hopefully someone out there in the world can answer, how does the savings component of the IS curve come into play?

Thanks, from an overworked and under-slept university student!!!!

Much love.

[theneezro]

what is z?

[MrJohny360]

z = goods and services

[easyp576]

lostmy1, you da man!

[4ognen4ognen4]

rockstar of macroökomics

[sameercid]

THANK YOU SO MUCH

[Olaray77]

Great job! Straight to the point explanation!!

[cosminboncea]

Brilliant explanation! This guy has such a light way of explaining it, that it sometimes looks too easy to be true!

[redplum007]

after i watched your video, all i could say was... WOW. thank you so much sir. --philippines.

[sleepyhead7391]

omg its sean connery!

[guyop]

That was very very good. Just need that, simple and well explained. Thank you so much.

I'm from chile

[thelocked16]

very very good video. thnx sir. love from pakistan :)

[Breenerz]

The word multi disappears at 2:43

[sKyerxD]

thank you, my professor s*cks

[BtownX]

I love YU. Youtube University.

[AudiROCKS]

@BtownX The textbook Wikipedia that comes with it is real good too :D

[addictionanime]

thanks, cleared up alot with this fuked up $350 dollar book

[awrote]

its worth it to remind that this is a first ***approximation*** for understanding the real world. Disputed, only accepted to be IMPERFECT!

[MalkayeTube]

THANK YOU SO MUCH, you are a 100 times better than my professor at univerity which couldn't explain anything in a whole semester.

i can't believe that i understood it better in english, than in my native language...!

greetings from germany and go on spreading knowledge!!

[Romeowasbleeding1]

Baie dankie mister!



[minakelada]

Maybe values would've been better left to fiscal and monetary policies explanations. I love the explanation but think i, i1 would've been easier

[minakelada]

Wow, simply amazing 

[sanniemp]

with an exam tomoro, this is a miracle

[LatinAmericanCowboy]

The lies of convention economics. The science of greed - as the US heads straight into a massive depression is anyone fooled by this non-sense?

[SirEllwood]

brilliantly explained. I watched 3 hours of lecture material from my univeristy and was still confused, then watched 4 minutes and 3 seconds from you and it made perfect sense!

[snakecrui]

@SirEllwood YES, it is brillian! I read books struggling, but after this video it became easier

[0effort]

thanks



[MrPlender]

Thank you so much this is fantastic! You are a god on earth. The IS and LM curves are tricky concepts that so many teachers struggle explaining coherently to students.

Please do the LM curve because in many ways this curve is tricker than the IS curve.

I have subscribed to you with this hope in mind! Once again, great explanation.

[LorysFan]

love it