Question

what are the constituent of money market? explain the step to restore equilibrium in good and money

Answer 1

The following are the important constituents of money market:
1. Call Money Market
2. Collateral Loan Market
3. Acceptance Market
4. Bill Market

The IS/LM model combines the goods and money market equilibrium’s to form an aggregate model that describes a general equilibrium setting in the macroeconomy.  This post will use a graphical approach to establish the intuition behind the building of the IS/LM framework which describes the money and goods markets.  A later post will develop the IS/LM model by using matrix algebra and derivatives to analyze the interactions between the money and the goods markets in the macroeconomy.

Hope this helps!!!