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If the Federal Government decreases government spending: What will be the effect on the interest rate, and price of bonds? What will be the effect

If the Federal Government decreases government spending:

  1. What will be the effect on the interest rate, and price of bonds?
  2. What will be the effect planned investment, aggregate expenditure, and output (GDP)?
  3. If the Federal Reserve wants to maintain interest rates: what actions would the Fed have to take?

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