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please answer question and inlcude diagram to show. 20 marks Question 2 Reducing fiscal deficit leaves more saving available for investment, so private investment must

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please answer question and inlcude diagram to show. 20 marks

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Question 2 Reducing fiscal deficit leaves more saving available for investment, so private investment must increase. Do you agree or disagree with this statement? Explain your answer in the context of the IS-LM model. (Hint: Consider two cases. In the first case, the LM curve is horizontal; in the second case, the LM curve is upward sloping.) [20 marks]

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