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Why in the is-lm model an expansionary fiscal policy

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Reference no: EM131893488

Using the IS-LM model employed in lectures with interest-setting monetary policy and endogenous money, answer the following:

(i) Explain why in the IS-LM model an expansionary fiscal policy causes zero 'crowding-out' until aggregate income reaches the full-employment level;

Reference no: EM131893488

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