RELACIÓN ENTRE LA CRUZ KEYNESIANA Y LA CURVA IS., Diapositivas de Economía

¡Descarga RELACIÓN ENTRE LA CRUZ KEYNESIANA Y LA CURVA IS. y más Diapositivas en PDF de Economía solo en Docsity!

Students: Alitzel Ortiz E RELACIÓN ENTRE LA CRUZ KEYNESIANA Y LA CURVA IS.

MONETARY POLITICS

RELATIONSHIP BETWEEN THE KEYNESIAN CROSS

AND THE IS CURVE.

IS CURVE The IS curve represents the relationship between the interest rate and the level of income that arises in the market for goods and services. KEYNESIAN CROSS According to Keynes, the more people want to spend, the more goods and services the companies can sell, the more the companies can sell, the more they decide to produce and the more workers they decide to hire.

4 ECONOMY IN BALANCE The economy is in equilibrium when the actual expenditure is the same as planned, this means that when people's plans have been realized, that has no reason to change what they are doing. ╺ (^) Y = EP ╺ (^) Cash expense = Planned expense The equilibrium of this economy is at point A, in which the planned expenditure function cuts to the 45 ° curve. An economy reaches equilibrium when the stocks of companies do not present unforeseen variations, which leads to altering

Example ╺ (^) In sum, the Keynesian cross shows how income Y is determined, given the levels of planned investment (I) and fiscal policy (G and T). This model can be used to show how income varies when one of these exogenous variables.

╺ (^) Why does fiscal policy produce a multiplier effect on income? Because, according to the consumption function C = C (Y-T) an increase in income causes an increase in consumption. When an increase in state purchases raises income, it also increases consumption.

FISCAL POLICY AND THE MULTIPLIER: OF TAXES. A reduction in taxes immediately raises income and therefore increases the PMC. Given any level of income, now the planned expenditure is higher.oa! That’s a big number, aren’t you proud? A reduction in taxes immediately raises income and therefore increases the PMC. Given any level of income, now the planned expenditure is higher.oa! That’s a big number, aren’t you proud?

The IS curve shows the level of income with which the goods market reaches equilibrium, given any interest rate. The IS curve is drawn considering the fiscal policy; that is, when the IS curve is drawn, G and T remain fixed. When the fiscal policy changes, the IS curve shifts. HOW THE FISCAL POLICY SHIFTS THE IS CURVE:

THANKS FOR

YOUR

ATTENTION

THANKS FOR

YOUR

ATTENTION

Bibliography:^ Bibliography: