IS-LM: Fiscal & monetary policy

This clip shows in simple examples how fiscal and monetary policy works in the IS/LM model. A combination of fiscal and monetary policy -- the policy mix -- can be used to achieve macroeconomic policy goals.

[@LunHaolai]

I really don't have time to go through those fat books since I am working; this helps me a lot for my degree exams.. Nicely explained with all the required graphs

[@suzyoshakeemba4124]

Youve opened my mind, couldn't understand the LM curve until i watched this vidoe

[@Jorghee316]

Very helpful thanks, you are probably the only one that did the policy mix for is/lm on youtube.

[@ricardoroopchan5]

thank you so much for this. I now realize there are two forces working towards the economy.

[@navinsingh1348]

😮 AA ○ ,, . , , W. . ..😂4. . ? . , . ,

[@Madakhi1]

Thank you so much, hopefully I pass my test tomorrow

[@samagrasingh1418]

did u pass mate?

[@cian1397]

@@samagrasingh1418 no

[@EconomicsUofUtah]

I'll teach the course again this Fall, and hope to get around to do more videos. Thanks for your feedback.

[@nafizelgun4003]

YOU ARE THE MAN! THANK YOU!

[@EconomicsUofUtah]

"... the decrease in the interest rate leads to an increase in investment"; that is correct and what I say around 8:14. Note that at that time (8:14) I'm using the Keynesian cross (income -expenditure diagram) where the interest rate is exogenous.

[@AllaahuAkbarr]

Amazing professor

[@akshayagarwal2179]

And I thought your earlier video was awesome, Many thanks!

[@zunketang9438]

super! thank you so much! hope you share more:)

[@shivambareja6024]

Great video👍

[@rahulmalik1083]

If you are taking the affect of increase/decrease of Y on investment , why not take its effect of consumption as well ?

[@nicholasvella5223]

Excellent explanation, thanks!

[@zurzakne-etra7069]

such a great video!

[@Sabong]

on the fiscal portion of the video, shouldn't there be a third IS line on the IS/LM graph, placed in the middle of the first two IS lines?? (4:57) Because after the interest rate is increased from #4, it results in a decrease in Y which should lead to another decreasing shift of the IS line.

[@nicholasvella5223]

a bit late i know ... but for the benefit of other readers: my understanding is that the IS curve explains shifts in Z due to changes in interest rates .. as it explains the relationship between Y and i for the goods market. An exogenous shock to the model like changes in G or T, however, are not explained. This means that for changes in i, there is simply movement along the IS curve. For changes in G or T, the IS curve must shift - at any previous interest rate, the equilibrium output is now changed.

[@MemeMand1996]

Dude, you are great, thank you so much!

[@365Pancakes]

Beautifully explained, thank you!

[@Maxl12765]

very helpful video thank you

[@ananyasrivastava2260]

Post more often please!!

[@akashkalyana8295]

Thank you very much,you saved the day:)

[@bamschilders]

About the policy mix. I now understand what they mean with that. My question though is, in Europe and USA and I think most western countries political leader can do fiscal expansion or contraction but are not in power of monetary expansion or contraction, because the head of the ECB or FED is independent and should not have to listen to policymakers so my question is, is a mix as you described something that is rare or does it happen often?

[@대한민국-t7y]

This video is much better than the lecture in my university! Even my first language is not English.... professor's explanation is bullshit

[@MkareJefwa93]

God Bless You So Much

[@ragu7nathan]

this is very helpful thx bro

[@Thisisahandle701]

This guy is literally a God.

[@louisemccarville]

If the country has a budget deficit, which policy should be used?

[@lenasong1689]

Thank u very much.it helps me a lot

[@ahmedshalaan6441]

iam ahmed from egypt and i study in faculty of commerce english department i want you help me in the economic please ?

[@nithinsairam5715]

Hi! What policy mix can be used if there is a fall in exports and raise in GDP?

[@thomascags6879]

Hi! I have a question. iincrease in money supply affects the LM curve shifting it downward which decrease interest rate and increases output. a decrease in interest rate, increases investment

[@MsMakasara]

simple and good.

[@tracya5194]

What if the interest rate was kept constant what would happen . I need a reply

[@srijaniroychowdhury7683]

In case of imposition of taxes equilibrium income will decrease by large amount that depending the reccesion

[@ThisIsTBChannel]

Excuse me, what's "z" in the goods market?

[@gb-dt3vk]

its the demand for goods curve that Keynes wants to control.

[@jenishastha7]

Awesome...thanks...now I am all ready for tomorrows presentation :D

[@ahmedshalaan6441]

which university do you study ?

[@jenishastha7]

Ahmed Shalaan Kathmandu University

[@ahmedshalaan6441]

+Jenisha Shrestha where are you from jenisha and which college do you study ?

[@fainna1]

Nice

[@Saurabhyadav-yb2oo]

And I m here after 4-5 yrs later 😂😂😂

[@jdvna]

which policy will be used for decreasing cash hoarders?

[@bestmage195]

Everything that rises (i) , the cashhoarders will 'lose' money if they don't invest it in higher (i) giving products. (opportunity costs)

[@jdvna]

is monetary or fiscal policy appropriate for managing cash hoarders?

[@savagereason9153]

Yes thats implied by the opportunity cost GGKK mentioned. Unless the cash hoarder has other reasons for holding cash. For example, illegal income would raise suspicion when deposited in large chunks at a bank.

[@huyang4685]

nicely explained! It's great

[@vQlse]

Okay, ill try again.. removed my own comment by a mitake :( At 8:14 you are drawing a relationsship between interest rate and investment, right? You draw a positive relationsship though it should be negative/downward sloping since higher interest rate leads to lower investment, right? To me it looks like this: as interest rate rises, investment rises. Right og wrong? :)

[@kathycarr3123]

Some brokers are not worth it to trade with they can only deceive one with rubbish strategies out of ones capital, Mr Frank Robert helped me with a great strategy and with a mighty software that actually works and to my greatest surprise he never demanded anything back from me, that's how real Broker/Account Managers do, they don't request for money to help. I pray that GOD Almighty shall continue blessing him for his good job.

[@kathycarr3123]

Fellow traders you can contact him for his strategy and help via email: [e-mail]

[@vice-108]

when demands in crease price of product decrease by 10% and use the increase sale in profit by buying material in bulk. If you understand what I said then you'll become a smart businessman

[@MrNewYork97]

No,it does not.When demand increases the price increases as well....

[@thareesoft]

Great!! thanks

[@sujithofficial696]

Nice explanation nw frd wps

[@serioulee1337]

so Y means output and Income at the same time?????

[@faysgolcariem7272]

was it the same between increase G and fiscal expansionary ?

[@landilemgqalelo6537]

thanx a lot, i wish my lecturers would teach like this, f#ck they make this stuff seem hard & complex

[@cherrycola0]

thank you :)

[@mohdtalha7460]

Sir aap awaz to thik kriye pls

[@Jagruk2098]

☺

[@JasminehaiderUK]

hi

[@neraisejimo]

Your explainations are so boring that it fits perfect for background before sleep

[@shivrajnogia7271]

thanks

[@fitfirst4468]

That's what happens when you try to be efficient ? Ehh..

[@lokwangsimonpeter8597]

Thanks for the nice presentation ,in facts have got the concepts under IS and LM curve.

[@s___s__]

Very helpful..thanks 💜

[@sunnyjim6216]

Thanks