Identify the question and horizon
Short-run output, inflation dynamics and long-run growth are different questions. MIT introduces IS-LM in a short-run closed-economy setting; that scope must be checked rather than assumed for every macroeconomic exercise.
For each model list endogenous variables, exogenous variables, fixed conditions, equilibrium conditions and adjustment mechanisms. Differences between these lists often explain differences in conclusions.
Solve an original classroom model
Suppose the fictional goods-market equation is Y=100+G−10i and the money-market equation is i=0.05Y−5. Units and coefficients belong only to this practice model; they are not estimates of a real economy.
At G=20, substitution gives Y=170−0.5Y, so Y≈113.33 and i≈0.667. Raising G to 26 gives 1.5Y=176, so Y≈117.33 and i≈0.867. Spending rises by 6 and output rises by 4.
Change the closure and explain the mechanism
The original model lets interest rates rise with output; the −10i term offsets part of the spending change. Now consider a different teaching closure that holds i at its original value. With that assumption, raising G by 6 raises Y by 6.
Neither calculation establishes a universal policy result. It shows how a changed monetary-policy closure changes the mechanism. Real-world application would require evidence about parameters, expectations, prices and economic openness.
Prepare a four-sentence explanation
State the question, what is held fixed, the equation through which the shock operates and the conditions on the conclusion. Keep a long-run capital-accumulation argument separate from a short-run demand argument.
Self-check: explain why “output always increases one-for-one with government spending” is incomplete using the two closures above. Bring your own derivation to a tutorial and keep assessed answers your own.
References
Your next step
Describe your university module, learning goal and attempted steps to discuss appropriate academic support.