Based on your understanding of the IS-LM model, graphically
illustrate and explain what effect a monetary expansion will have
on output, the interest rate, and investment.
Increases in the budget deficit are believed to cause
reductions in investment. Based on your understanding of the IS-LM
model, will a fiscal policy action that causes a reduction in the
budget deficit cause an increase in investment? Explain.
First, briefly explain what is meant by the policy mix. Second,
explain what effect different...