Re: ISI 2005 - IS LM Query

Posted by Akshay Jain on Oct 28, 2013; 1:25pm
URL: http://discussion-forum.276.s1.nabble.com/ISI-2005-IS-LM-Query-tp7584178p7584181.html

after setting up the IS-LM equations...substitute the value of int rate from LM equation into the IS equation and u will get the aggregate demand curve for the economy......now the effect of change in price on output will be
change in Y = dY/dP *(P1-P0)
now u have the equation of AD curve Y=function(...)
put this value of Y in LM equation and get an equation in the form of int rate = function(...)
change in int rate = di/dP *(P1-P0)