Question:

How is the IS-LM model affected by a monetary contraction?

by  |  earlier

0 LIKES UnLike

any ideas?!

 Tags:

   Report

1 ANSWERS


  1. LM curve shifts up from LM2 to LM1 on graph ( http://bcjournal.org/dev/wp-content/them... ),  thus equilibrium goes along IS curve left and up, to the new higher interest rate and lower GDP in short-run.

Question Stats

Latest activity: earlier.
This question has 1 answers.

BECOME A GUIDE

Share your knowledge and help people by answering questions.