The foundation of the IS curve is the national income identity given by the equation $Y _ { t } = C _ { t } + I _ { t } + G _ { t } + LM _ { t } - E X _ { t }$
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Question

The foundation of the IS curve is the national income identity given by the equation $Y _ { t } = C _ { t } + I _ { t } + G _ { t } + LM _ { t } - E X _ { t }$ 
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Quizplus · Accepted Answer

The IS curve is based on the national income identity $Y = C + I + G + (X - M)$, where $X$ is exports and $M$ is imports, not "LM" which typically refers to the money market in macroeconomic models.

The Foundation of the IS Curve Is the National Income Yt=Ct+It+Gt+LMt−EXtY _ { t } = C _ { t } + I _ { t } + G _ { t } + LM _ { t } - E X _ { t }Yt​=Ct​+It​+Gt​+LMt​−EXt​

The Foundation of the IS Curve Is the National Income $Y _ { t } = C _ { t } + I _ { t } + G _ { t } + LM _ { t } - E X _ { t }$