Goods and financial markets The IS LM mo

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5 .1 Th e goods m a r k e t a n d t h e I S r e la t ion

I n v e st m e n t , sa le s a n d t h e in t e r e st r a t e

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5 .1 Th e goods m a r k e t a n d t h e I S r e la t ion

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5 .2 Fin a n cia l m a r k e t s a n d t h e LM r e la t ion

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5 .3 Pu t t in g t h e I S a n d t h e LM r e la t ion s t oge t h e r

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Focu s: Th e Sou t h Afr ica n r e ce ssion of 2 0 0 8

Figu r e 1 Real gr oss dom est ic expendit ur e for Sout h Afr ica

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5 .5 H ow doe s t h e I S- LM m ode l fit t h e fa ct s?

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5 .5 H ow doe s t h e I S- LM m ode l fit t h e fa ct s?

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Appe n dix : An a lt e r n a t iv e de r iv a t ion of t h e LM r e la t ion a s a n in t e r e st r a t e r u le