Discussion:
Instructions
1. Explain this equation: Y = Yad = C + I + G + NX.
2. Provide the equation for C and explain its importance.
3. Describe the Keynesian cross diagram and explain its use.
4. Describe the investment-savings (IS) curve and its characteristics.
5. Describe the liquidity preference-money (LM) curve and its characteristics.
6. Explain why equilibrium is achieved in the markets for goods and money.
7. Explain the IS-LM model's biggest drawback.