The economics of money, banking, and financial markets

FYI  Meaning of the Word Investment 482

Planned Investment Spending ............................................................................................ 482

Government Purchases and Taxes ....................................................................................... 484

Net Exports ........................................................................................................................ 485

Goods Market Equilibrium .......................................................................................................486

Solving for Goods Market Equilibrium ............................................................................... 486

Deriving the 

IS Curve ......................................................................................................... 487

Understanding the IS Curve .....................................................................................................487

What the 

IS Curve Tells Us: Intuition ................................................................................. 487

What the 

IS Curve Tells Us: Numerical Example ................................................................ 487

Why the Economy Heads Toward the Equilibrium ............................................................. 489

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Contents in Detail 

xxvii

Factors that Shift the IS Curve ..................................................................................................489

Changes in Government Purchases ..................................................................................... 489

APPLICATION

  The Vietnam War Buildup, 1964–1969 ............................................490

Changes in Taxes ................................................................................................................ 491

APPLICATION

  The Fiscal Stimulus Package of 2009 ...............................................492

Changes in Autonomous Spending ..................................................................................... 493

Changes in Financial Frictions ........................................................................................... 495

Summary of Factors That Shift the 

IS Curve ....................................................................... 495

Summary 495  •  Key Terms 495  •  Questions 496  •  Applied Problems 497  •   

Data Analysis Problems  498   •   Web Exercises  499   •   Web References  499