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Finance social welfare programs

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The Bulgarian lev is currently pegged to the euro. Using the IS-LM diagrams for Home (Bulgarian lev) and Foreign (Eurozone) illustrates how each of the following scenarios affects the Bulgarian lev. Assume that the Eurozone is the center

a. Bulgaria increases government spending to finance social welfare programs.

b. The Eurozone countries decrease the money supply.

Reference no: EM133063865

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