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Questions › IIT JAM › IIT JAM 2026 › Q33
2 marksMacroeconomics › IS-LM model › Equilibrium and shifts in IS-LMHardabout 3 min

IIT JAM 2026 Question 33: IS-LM model

Goods market: Y=C+I+GY=C+I+GY=C+I+G, C=20+0.75(Y−T)C=20+0.75(Y-T)C=20+0.75(Y−T), T=−40+0.2YT=-40+0.2YT=−40+0.2Y, I=240−8iI=240-8iI=240−8i, G=300G=300G=300. Money market: Ms=MdM^s=M^dMs=Md, Md=0.2Y−15iM^d=0.2Y-15iMd=0.2Y−15i, Ms=200M^s=200Ms=200. Identify the CORRECT option(s).

Select all that apply.

Answer and worked solution

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Plain-text version

Goods market: Y=C+I+G, C=20+0.75(Y-T), T=-40+0.2Y, I=240-8i, G=300. Money market: M^s=M^d, M^d=0.2Y-15i, M^s=200. Identify the CORRECT option(s). (A) The IS equation is i=73.75-0.05Y (B) The LM equation is i=0.0133Y-13.33 (C) The equilibrium i=7 and Y=1400 (D) If G decreases to 200, then new equilibrium i=4 and Y=1200

IS-LM model has come up 137 times in 7 exams since 2004.

What this question tests

This question is on Equilibrium and shifts in IS-LM, part of IS-LM model in Macroeconomics.

Solving for income and the interest rate and tracing what shifts each curve.

TestStop has 18 past-paper questions on this subtopic; the nearest in year are below.

  • IIT JAM 2022 · Q57Product market: C = 300 + 0.8(Y - T), T = 200 + 0.2Y, I₀ = 300, G₀ = 400. Money market: M₀/P = 0.4Y - 200i…
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Question from the IIT JAM 2026 paper. Solutions are TestStop's own. Not affiliated with or endorsed by any examination authority.