Question

The IS-LM model’s biggest drawback is that it doesn’t consider changes in the investment leve1. True 2. False

Answer 1

Answer:

The correct answer is number (2): False.

Explanation:

The Investment-Savings (IS) Liquidity preference-money supply (LM) or IS-LM model describes the changes between economic goods (IS) related to investments (LM). Usually portrayed in a graphic, the approach aims to show how the IS an LM interact to balance the production of the overall economy.