Econ 476 Unit 7 Aggregate Demand and Aggregate Supply in,
*In the closed economy, macroeconomic equilibrium occurs where IS and LM curves intersect. *When prices change, IS curve is not affected. *When prices change, real money supply changes, shifting the LM curve. *We can trace out the aggregate demand (AD) curve byIntroduction to Fiscal Policy | Boundless Economics,Fiscal policy is the use of government spending and taxation to influence the economy. Governments use fiscal policy to influence the level of aggregate demand in the economy in an effort to achieve the economic objectives of price stability, full employment, and economic growth.Chapter 12: The Mundell-Fleming Model & Exchange-Rate,Chapter 12: The Mundell-Fleming Model and the Exchange-Rate Regime 17/50 Y Y1 1 IS * e1 buy domestic currency, which reduces M and shifts LM* back left. Results: ∆∆∆∆e = 0, ∆∆∆∆Y = 0 Under fixed rates, monetary policy cannot be used to affect output .