RMIT: Financial Test Notes Research Conventional paper

п»їW/J model a couple of sector: towards the right of Ye: Personal savings > Prepared Investments GDP= total market value of final g& p (ofcourse not measured in monetary units bla bla bla.. ) At Ye, if X = M, S + T sama dengan I + G,

Price is exogenous and regular

Investment Expenses: Total exp on machines etc and CHANGES in total invent/stock Reduced output reduces leakages

Economic accomodation is used together with monetary policy. By using monetary policy to counteract crowding away effect

C I G NX shifts IS shape, determined by Multiplier and size of change of autonomous experience ke ↑ / My spouse and i sensitive to i= IS USUALLY & ADVERTISING Flat

ke ↓ / I insensitive to i= IS & AD Large

Multiplier of LM (k) measures sensitivity of Mt to Y. Large T = Delicate k ↓ or Mother inelastic= LM Flat

e ↑ or Ma elastic= LM High

Any becomes Md or Ms unrelated to i/Y will shift LM

Ms ↑ shifts LM to the right (e. g. RRR decreases, POREM prints money) Md ↑ shifts LM to the left (e. g. Assurance in a genuine increase) [Md sama dengan Ma + Mt] Mt sama dengan k. Con | Mum = -f(i) --> R/i ↑ = Ma ↓ ---> Mt ↑ to revive Ms=Md incline of LM depends on Mum & Mt (but really Ma)

In the event Ma sama dengan 0, LM = vertical

Slope of Ma determined by substituability of cash/bonds

Slope of Mt determined by size of k

Mt = contrary of incline of LM e. g. Mt=-2, LM=2 (slope)

Incline of LM schedule is determined by Mt and r/i responsiveness of Mum

R/i ↑ -> Y ↓

R/i responsiveness of IDC does not have an effect on slope of LM

R/i responsiveness of IDC affects slope of IS

Large LM sama dengan Monetary policy effective

Large IS sama dengan Monetary coverage ineffective

Fluidity trap sama dengan r/i moved lower and lower = Monetary policy ineffective ↑G --> change IS to the proper by e. △ G and maximize Ye by less than that amt (crowding out) ADVERTISEMENT curve can be derived from IS-LM by switching LM while △ P via Interest Effect IS Steep = monetary coverage weak

LM steep sama dengan monetary plan strong

merely & C are unconcerned to r/i / sharp / inelastic --> then IS is steep в–і P will not likely affect placement of ADVERTISING

In deriving...



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