IS-LM Model

Money supply policy, Fiscal policy, Steering of Interest and Output

Inputs: Goods market
Fiscal policy
G
T

Y (FE)
a
b
d
n
Inputs: Money Market
Money supply policy
M = M(S)
P
L curve (M/P demand)
k
h
Primary Outputs
Y
%
i
M = M(S)
G
T
Secondary Outputs
(M/P)
%
[Y-Y(FE)]/Y(FE)
I