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IS & LM Vertical Conditions
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Ashish Gourav
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Apr 24, 2018; 8:59am
IS & LM Vertical Conditions
When is an IS or LM curve vertical?
Monetary policy shifts the LM curve left/right or top/bottom?
Fiscal policy shifts the IS curve left/right or top/bottom?
Loves charts & graphs, Writer, IIT Kharagpur Alum
Abhinav joshi
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Apr 26, 2018; 4:48am
Re: IS & LM Vertical Conditions
Lm is vertical when demand for money is perfectly inelastic
On the otherhand IS is vertical when investment is interest inelastic
Abhinav joshi
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Apr 26, 2018; 4:55am
Re: IS & LM Vertical Conditions
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by Ashish Gourav
Shifting actually depends on the slope of IS AND LM , if they are vertical ( interest inelastic)then any policy will shift them left or right
But when the elasticity is less than infinity then any policy change would shift them up and down
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