Answer to Question #142884 in Macroeconomics for John

Question

What is the IS curve? Is it related to Aggregate Demand? Explain

Answer 1

IS-LM model (investment - savings, liquidity preference - money) - model commodity - monetary balance, allowing to identify economic factors, determining the aggregate demand function. The model allows you to find such combinations market interest rate R and income Y, at which

balance in the commodity and money markets. Therefore, the IS-LM model is a concretization of the AD-AS model.