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3) Suppose the administration is pursuing and expansionary scal policy and at the same time the FED is pursuing a tight monetary policy. a. Use

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3) Suppose the administration is pursuing and expansionary scal policy and at the same time the FED is pursuing a tight monetary policy. a. Use the IS-LM diagram to show the combined effect of the two policies. Label an initial point of equilibrium before the polies are implemented as point A. Label the new equilibrium after policy implementation point B. Explain what you have done - which curve shifts which way and why! 0. Why would these policies be pursued

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