From a set of info what do you need to do to derive the IS/LM lines on a graph?

Question

really badly need help!

I am given the price (p) , money supply (Ms) , and equations for the consumption, investment, government expenditure, imports, exports, direct income tax etc

Answer 1

The axes you need for the ISLM are Output/Income (Y) and interest rates (r).

The IS curve shows the points where the goods market is in equilibirum, that is the levels of output that would generate equilibrium at different levels of interest. IS actually stands for Investment=Savings which is the equilibrium condition for a closed economy without government.

For that you'd need the National Income Equation:
Y=C+I+G-T+X-M
Y: Income
C: Consumption
G: Government Exp
T: Taxes
X: Exports
M: Imports

Now, Consumption will be a function of interest rates (r), so will Investment.
So you have an equation relating Y and r, equilibrium in the goods market.

The LM curve is the combination of interest rates and incoem that clear the money market. LM is so called because most often the demand for money is written as L, and the supply of Money as S.

You need:
Ms = Md
Ms: Money Supply
Md: Money Demand

I am guessing the Md is in the form of the price equation in your case, since:
Md= L(r, p, Y)
Money demandis a function/depends on interest rates, prices, and Income.

Equating Ms and Md gives you the equation relating r and Y for Maney Market Equilibrium.

Now to bring it all together:
Equate IS and LM and you have the combination of r and Y that simultaneously clear the goods and money markets.

Answer 2

The IS-curve defines the points of equilibria in the market for goods (price and quantity), while the LM-curve defines the points of equilibria in the market for loanable funds (money supply and money demand).

Use the national accounting equation (C+I+G+(X-M)) to determine total output and proceed from there.