explain how product market is in equilibrium along IS curve
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Derivation of IS Curve: The IS-LM curve model emphasises the interaction between the goods and money markets. The goods market is in equilibrium when aggregate demand is equal to income. Thus, changes in the rate of interest affect aggregate demand or aggregate expenditure by causing changes in the investment demand.
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Derivation of IS Curve: The IS-LM curve model emphasises the interaction between the goods and money markets. The goods market is in equilibrium when aggregate demand is equal to income. ... Thus, changes in the rate of interest affect aggregate demand or aggregate expenditure by causing changes in the investment demand.
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