# Suppose that: C = c_0 + c_1 (Y - T) T = T_0 I = I_0 G = g_0 + (g_1)^i Then the equation for the...

## Question:

Suppose that:

C = c_0 + c_1 (Y - T)

T = T_0

I = I_0

G = g_0 + (g_1)^i

Then the equation for the IS curve is:

## IS-LM Model:

The IS-LM model is a classic Keynesian model of short-term equilibrium income and interest rate. The model is a general model that consists of two markets: the goods market and the money market. The goods market equilibrium is represented by the IS curve, while the LM curve represents the money market equilibrium.

## Answer and Explanation: 1

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View this answerThe IS curve is derived from the equilibrium condition in the goods market, which states that aggregate demand is equal to aggregate expenditure,...

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Chapter 60 / Lesson 2In economics, aggregate supply and demand are used to determine the production and purchasing power of the economy. Learn about aggregate supply and aggregate demand, and explore the details of the AS/AD model devised by John Maynard Keynes.