IS and LM curve CFA?

The IS-LM Model The intersection of the IS and LM curves shows the equilibrium point of interest rates and output when money markets and the real economy are balanced. If we move one of the two curves to the right or the left, the model gives us a new economic output and interest rates.

What is the IS and LM curve?

The IS-LM graph examines the relationship between output, or gross domestic product (GDP), and interest rates. The entire economy is boiled down to just two markets, output and money; and their respective supply and demand characteristics push the economy towards an equilibrium point.

What shifts the IS-LM curve?

Key Takeaways The LM curve shifts right (left) when the money supply (real money balances) increases (decreases). It also shifts left (right) when money demand increases (decreases).

IS and LM curve equation?

Algebraically, we have an equation for the LM curve: r = (1/L 2) [L 0 + L 1Y – M/P]. r = (1/L 2) [L 0 + L 1 m(e 0-e 1r) – M/P].

Is CFA curved?

Not a curve The Angoff Method purely determines how well someone who has the required knowledge to have passed the CFA® exam level would have scored and then relates the individual candidates to that benchmark.

IS-LM model example?

IS-LM model is a macroeconomic model that links the output level of an economy in the short-run with interest rate determined by the interplay of fiscal policy and monetary policy in the goods market and financial market.

Why LM curve is positively sloped?

The LM curve has a positive slope because as income increases, money demand increases and bond demand decreases for a given interest rate.

What affects the slope of the LM curve?

The slope of the LM curve depends upon the income elasticity and the interest elasticity of the demand for money. Income-elasticity measures the responsiveness of the demand for money to changes in income while interest elasticity measures the responsiveness of the demand for money to changes in the rate of interest.

What is the slope of IS curve?

The slope of the IS curve also depends on the saving function whose slope is MPS. The higher the MPS, the steeper is the IS curve. For a given fall in the interest rate, the amount by which income would have to be increased to restore equilibrium in the product market is smaller (larger), the higher (lower) the MPS.

Why is CFA passing rate so low?

So why are recent pass rates so low? Many professional exams have been disrupted by COVID-19, delaying enrollees for a few months. However, unlike other professional exam enrollees, CFA candidates have been disrupted since March 2020 when CFA Institute announced the cancelation of the June 2020 exams.

Why is CFA rate so low?

The September results for the final test follow historically low pass rates across all levels of the CFA exam in recent months. The institute has cited testing disruptions stemming from the Covid-19 pandemic as a reason for the trend.