Macroeconomics asks the great god of economics for guidance! How to treat the supply and demand of products and money on both sides of IS and LM lines?

IS line is the product market curve and LM is the money market curve. The point on the IS line represents the product market equilibrium, that is, the supply and demand are equal. At this time, investment and savings are equal. Below the IS curve, I>s investment is greater than savings, that is, products are in short supply. The lower part of LM curve represents money supply >; Money demand.

The expansionary fiscal policy makes the IS curve move to the right, and the expansionary monetary policy makes LM move to the right. This is a very basic macroeconomic theory, and Gao Hongye's version of macro-microeconomics is a thorough analysis.

Extended data:

IS-LM model is an important tool for macroeconomic analysis and a theoretical structure to describe the relationship between product market and currency.

In the product market, national income depends on the total expenditure or total demand level of consumption C, investment I, government expenditure G and net export X-M, while total demand, especially investment demand, is affected by interest rate R, which is determined by the supply and demand of money market, that is, money market will affect product market;

On the other hand, the national income determined by the product market will affect the money demand, thus affecting the interest rate, which is the influence of the product market on the money market. It can be seen that the product market and the money market are interrelated and interactive, and the income and interest rate can only be determined in this connection and interaction.

Baidu encyclopedia -ISLM curve