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Lecture The economics of Money, Banking and Financial markets: Chapter 23 The Keynesian Framework and the ISLM Model. The ISLM model is valuable not only because it can be used in economic forecasting but also because it provides a deeper understanding of how government policy can affect aggregate economic activity. In Chapter 23 we use it to evaluate the effects of monetary and fiscal policy on the economy and to learn some lessons about how monetary policy might best be conducted. |
