Consider a closed Keynesian economy and assume the economy is initially in general equilibrium. contic ase do Plea Abute (a) (5 marks) If the government raises tax to finance an increase in government spending, how would desired national saving be affected? Explain briefly and illustrate using a graph. al. Please Stribute, (b) (10 marks) Use the IS-LM-FE model to explain how economy will respond to the expansionary fiscal policy in the short run and in the long run and illustrate using a graph. not distri ple idential. not distribute Now consider a Keynesian small open economy and the domestic price level is fixed initially. distribute ntial. Please distribute (c) (10 marks) In a flexible-exchange-rate system, explain briefly how the economy will respond the fiscal expansion in the short-run and in the long run and illustrate using a graph. istri Confidential. not ential (d) (10 marks) In a fixed-exchange-rate system, explain briefly how the economy will find respond the fiscal expansion in the short-run and in the long run and illustrate using a graph