This book offers a concise and clear introduction to the core concepts of macroeconomic analysis, focusing on the functioning of the goods and money markets and their interaction through the IS–LM framework. It explains the components of the goods market, the impact of government spending and the derivation of the IS curve, along with the relationships between private savings, public savings and investment.
The discussion on the money market covers the motives behind the demand for money and the derivation of the LM curve, leading to an understanding of how interest rates and output are jointly determined. The book also examines simultaneous equilibrium, macroeconomic stability and key situations such as the liquidity trap, the crowding-out effect and the effects of increased government spending.
Contents –
Module I: The Goods Market
Module 2: The Money Market
