economics medium Fill in the Blank

The IS-LM model, which illustrates the intersection of the real economy (goods market) and the monetary economy (money market), was developed by John Hicks and Alvin Hansen as a mathematical interpretation of the theories of ___.

  1. India Debt Resolution Company Ltd (IDRCL)
  2. lending (or credit)
  3. Capital
  4. John Maynard Keynes

Answer: John Maynard Keynes

While Keynes published his revolutionary 'General Theory' in 1936, it was highly conceptual and literary. Hicks and Hansen formalized Keynes's ideas into the IS (Investment-Savings) and LM (Liquidity preference-Money supply) framework, creating the foundational macroeconomic model used to analyze the effects of fiscal and monetary policy on national income and interest rates.

Topic Macroeconomics - Models
Exam Relevance UPSC Prelims, SSC CGL
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