Answer to Question #236412 in Macroeconomics for KAT

Question

Question: Define and derive IS curve? which variable shift the position of the IS schedule ?

Answer 1

IS curve tends to depict set of every output and interest rate level where total saving is equal to and total investment.

Deriving IS curve model tends to focus on the interaction between money markets and goods.

IS curve is based on IS schedule, however the IS schedule adjusts to exogenous variables leading to its position. This involves changes in expected income, total wealth, taxes and working capital.