Government spending and reduction in money supply

Reference no: EM133640725

Question

Use the IS-LM model. Suppose there is a simultaneous increase in government spending and a reduction in the money supply. Explain what effect this particular policy mix will have on output and the interest rate. Based on your analysis, do we know with certainty what effect this policy mix will have on investment? please write graph and Explain

Reference no: EM133640725

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