IS-LM model: Derivation of an IS curve
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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!
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I love YU. Youtube University.
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All Comments (43)
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@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.
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why Y= 1500. is multify 5 just an assumsion?
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den becent
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why did he put 300 on y axis?????? should it of been 150?
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Yes we assume it is 5 and therefore the equilibrium income is 5 x 300 = 1500.
lostmy1 1 week ago
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!
EternalTempest 4 weeks ago in playlist IS-LM model
@EternalTempest You are right. The vertical intercept consists of autonomous C + autonomous G + investment. The other 150 is then made up of C + G.
lostmy1 4 weeks ago
Why 150?
lostmy1 2 months ago