Economics Tutor Edinburgh – Top Microeconomics, Macroeconomics, Econometrics tutors in Edinburgh
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The sample tutorial shows the IS-LM framework which is a key topic for any intermediate level macroeconomics course. The IS curve represents an equilibrium in the goods market. It is derived using the aggregate expenditure function and the role of interest rates. Each level of interest rate in the economy corresponds to a real output level. The IS curve represents all such equilibria of interest rate and output originating from the goods market.
The LM curve shows equilibrium in the money market. It is derived from money demand and money supply curves. Money demand is controlled by households and depends on inflation expectations and the level of income. While money supply is controlled by the Central Bank.
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