A Simple Way to Teach the Derivation of Aggregate Demand

Abstract:     
In this paper, we present a simplified macroeconomic model where money demand does not depend on the level of income. We then derive aggregate demand in a simple four quadrant diagram similar to a standard IS-LM. The analysis is extended to a model including net exports. The standard economic policy results can be obtained from this model.

Number of Pages in PDF File: 13

JEL Classification: A22

working papers series