Macroeconomics: How to Derive the LM Curve (IS-LM Model)
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Macroeconomics: How to Derive the LM Curve (IS-LM Model)
This video provides a step-by-step explanation of how to derive the LM curve from the money market. We start with the equilibrium in the money market (Money Demand 'L' and Money Supply 'M') and see how a change in output/income (Y) affects the equilibrium interest rate (R). This explanation demonstrates why the LM curve slopes upward. We also ...
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