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Post by Guest on May 13, 2016 14:30:02 GMT
We observe an increase in i*. In my opinion, it should shift out IS, which increases Y. Wouldn't it mean that Md shifts right? In your graph it looks like it that when i* shifts up, Md shifts let, which I think is wrong
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Post by Oliver on May 13, 2016 21:24:53 GMT
Mmm. What you write is correct. But, that is also exactly what the diagram is showing.
Increase in i* ---> Right shift of IS ---> Right shift of Md
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Post by ec on May 13, 2016 21:31:57 GMT
so why does M(s) cut the lower level of M(d)?
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