12. IS/LM: Effects of a monetary expansion

Interacting with graphs to learn more about the effects of a monetary expansion

The Chairman of the Federal Reserve is one of the most powerful people in the world. The financial media pays attention to him
as if he were Michael Jordan. Why? Because monetary policy has enormous effects on the macroeconomic variables. Let's look at the IS and LM curves to see how a monetary expansion affects interest rates and output.

Objectives

• Illustrate the effect of a monetary expansion on output and interest rates

Click on the 'Exploration' link above to continue.