To incorporate an international sector into a closed IS-LM model, it is necessary to

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Incorporating an international sector into a closed IS-LM model requires adjusting only the IS curve because the IS curve represents the relationship between interest rates and output (GDP) for a given level of investment and savings, including net exports. Changes in net exports due to international trade directly affect the IS curve, while the LM curve, which represents the relationship between the interest rate and the level of income that equates the demand for and supply of money, remains unaffected by the introduction of the international sector.

To Incorporate an International Sector into a Closed IS-LM Model