7. The derivation of the IS curve

Interacting with graphs to learn more about the derivation of the IS curve

The Investment/Savings (IS) curve is one of the most important tools used by macroeconomists. Together with the LM curve (which you will learn about in another active graph), the IS curve is used to determine what interest rates and output will exist in an economy. To clearly understand how the position of the IS curve is affected by economic factors, you need to remember how the IS curve is derived.

Objectives

Click on the 'Exploration' link above to continue.