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[object Object],[object Object],[object Object],[object Object]
  The IS curves slopes downwards because as income increases, saving also increases and rate of interest falls
[object Object],[object Object],[object Object],[object Object]
The LM curve slopes upwards because as income increases, rate of interest also rises because of a rise in the demand for money.  LM curve is derived from the money market. Each point on the LM curve is a point of equilibrium in the money market.
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Effectiveness of mp

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  • 3.   The IS curves slopes downwards because as income increases, saving also increases and rate of interest falls
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  • 5. The LM curve slopes upwards because as income increases, rate of interest also rises because of a rise in the demand for money. LM curve is derived from the money market. Each point on the LM curve is a point of equilibrium in the money market.
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