1. Consider the model on page 178 stated below: Look now in the second paragraph of page 191 under Numerical Example to see how one can derive the AD curve. As its 3 rd line says, "setting the ...

Thus, the LM equation must be replaced ... Now suppose we get rid of the LM curve, as Blanchard proposes, and instead assume that the interest rate represents monetary policy.

To calculate the new value of GDP and the new level of interest rates, derive the equations of the IS and LM curves, and then find the coordinates of the point where they intersect. Nothing has ...

the LM curve is typically derived from the equation M=f(Y, r), where money demand is a function of output (Y) and benchmark interest rates (r). The latter is assumed to be sufficient to determine ...