Question

Use an IS curve and an MP curve to derive graphically the AD curve.

Short answer

AD curve Using IS curve and MP curve .

Step-by-step solution

Concept Preface 

Preface MP wind shows the correlation between the real interest settled by a public bank and the affectedness rate. Shown by the$r=\overline{r+\lambda \pi }$. advertisement arc shows the total sum of goods and services demanded by the frugality at given prices.IS arc shows the correlation between total fruit and real claim class when the goods demand is in equilibrium.

Explanation of Result

The below arc shows the derivative of IS arc. The arc shows that developed real claim classes leads to lower planned investment spending and net expots and hence aggregate affair falls from$\$10.5$trilion to to$\$10.0$trillion to$\$9.5$trillion.

The below MP arc shows that as affectedness rises from$1.0to2.0to3.0$the real claim class rises from$1.5to2.0to2.5.$

:Explanation of Result 

The figure (3) depicts the degree of equilibrium fruit corresponding to each of the three affectedness rates the lines that connects these points is the Announcement arc and it's bowed slopping.