The expansionary fiscal policy, such as the government spending
increase. In reality the effectiveness of such an expansionary
fiscal policy will likely be limited by numerous factors because of
the crowding-out effect. As you may be aware, Fed has kept the
interest rate at its lower bound, i.e., close to zero, and in this
situation the LM curve becomes completely flat. Use the IS-LM
framework to explain whether the government spending increase
becomes more or less effective in this particular...