overall equilibrium - maintains equilibrium in both goods/money markets
- shift in IS or LM curves >> new equilibrium
- solve for Y in IS, LM relations
- set equations equal to each other to find IS-LM equilibrium
- cannot use interest rates to shift curves
- interest rates = result of interaction between goods/money market
![](sites/www.course-notes.org/files/past/images/islm-equilibrium.gif)
- LM curve
- IS curve
- equilibrium between goods and money markets
- LM, IS curves just explain both markets in terms of interest and output