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Suppose that the government wishes to decrease the size of its deficit, G-T. Suppose, however, that the government does not want aggregate demand to decrease.

Suppose that the government wishes to decrease the size of its deficit, G-T. Suppose, however, that the government does not want aggregate demand to decrease. Using IS-LM analysis and words, explain what monetary and fiscal policy should be utilized to accomplished these goals. Be sure to provide the economic explanation for all of the statements you make.

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