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10 (10 points) Suppose a closed economy is currently producing above its full capacity. Knowing that you are an expert in macroeconomic, policy makers want
10 (10 points) Suppose a closed economy is currently producing above its full capacity. Knowing that you are an expert in macroeconomic, policy makers want you to suggest a policy that would bring the economy back to its full-employment equilibrium and, at the same time, prevent the level of investment from falling. What kind of policy, fiscal or monetary, would you suggest? Explain with the help of ONE IS-LM diagram
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