Question

Explain the modern theory of Interest and Profit.​

Answer 1

Answer:

According to the modern theory of interest, the equilibrium rate of interest and equilibrium level of income are determined simultaneously at the point of intersection between the IS and the LM curves. ... In figure 11, the general equilibrium is reached at point E where IS and LM curves intersect each other.

Answer 2

Answer:

According to the modern theory of interest, the equilibrium rate of interest and equilibrium level of income are determined simultaneously at the point of intersection between the IS and the LM curves.

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