Economics · Macroeconomics
Which of the following statements is INCORRECT regarding the IS-LM model?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The interaction of IS and LM schedules shows the simultaneous equilibrium in the goods market and in the money market.
- 2IS curve and LM curve show the equilibrium in the money market and in the goods market respectively.✓
- 3Investment is a function of both the rate of interest and the level of income.
- 4Saving is an increasing function of income.
Correct answer
IS curve and LM curve show the equilibrium in the money market and in the goods market respectively.
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