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Intermediate Macroeconomics QUESTION 3 The slope of IS and LM will influence the effectiveness of monetary and scal policy. Assume that investment demand is very

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Intermediate Macroeconomics

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QUESTION 3 The slope of IS and LM will influence the effectiveness of monetary and scal policy. Assume that investment demand is very sensitive with the changes in the interest rate while the interest elasticity of money is low. Explain the effectiveness of monetary and fiscal policy. (10 marks)

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