The IS/LM model (Investment—Saving / Liquidity preference—Money supply) is a macroeconomic tool that demonstrates the relationship between interest rates and real output in the goods and services market and the money market. The intersection of the IS and LM curves is the "general equilibrium" where there is simultaneous equilibrium in both markets.
Read more about IS/LM Model: History, Formation, Shifts, Incorporation Into Larger Models
Famous quotes containing the word model:
“... if we look around us in social life and note down who are the faithful wives, the most patient and careful mothers, the most exemplary housekeepers, the model sisters, the wisest philanthropists, and the women of the most social influence, we will have to admit that most frequently they are women of cultivated minds, without which even warm hearts and good intentions are but partial influences.”
—Mrs. H. O. Ward (1824–1899)