Lecture 9: ReviewLMISSlide 4IS-LM ModelSmall dI/diSlide 7Small dMd/dYSlide 9Lecture 9: Review•IS-LM•IS-LM•IS-LMLM**LMYMiiMd(Y0)Md(Y1)Y0Y1i0i1A) Expansionary Monetary Policy; B) Y2kISOLD: Y = C(Y-T) + I + G I = I(Y,i) + -IS: Y = C(Y-T) + I(Y,i) + GWhy IS?ISISYY0 Y1i1i0Z(i0)Z(i1)A) Fiscal Policy; B) “Optimism”IS-LM ModelYiISLMA) Fiscal policy; B) Monetary policy; C) MixParameters (slopes): L’ ; I_i; c1Small dI/diISYY0 Y1i1i0Z(i0)Z(i1)A) Fiscal Policy; B) “Optimism”Z’(i1)Small dI/diYiISLMA) Fiscal policy; Monetary policy; B) What about small d(C+I)/dY?Small dMd/dY**LMYMiiMd(Y0)Md(Y1)Y0Y1i0i1A) Expansionary Monetary Policy Md’(Y1)LM’Small dMd/dYYiISLMA) Fiscal policy; Monetary policy; B) What about small
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