So for the IS curve, the higher the interest rate, the less investment there is, which results in less real GDP.
However, for the LM curve, the higher the interest rate, the higher investments there are and less demand for money?
I’m so confused as both seem to offset each other. I’m having some real difficulties in making sense of both of these curves.
Where in the curriculum does it say this?
Could you explain the IS / LM curve in your own words?
I’m hearing so many different interpretations of it, and MM isn’t too clear on it imo.
I wrote a series of articles on IS/LM about 8 years ago in which I did exactly that. You can see them (along with more than a dozen other articles on Level I Economics) here: Level I – Economics | Financial Exam Help 123
The bad news is that they’ll cost you USD 10: CFA® Level I Economics Membership | Financial Exam Help 123
The good news is that I plan to write other Level I Economics articles as time permits, so you’ll get even more for your money.
Alright, purchased. Hopefully it helps. Thanks.