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Within a closed economy IS-LM model, analyse the effects on income, the interest rate, consumption, and investment of the following: A fall in the government
Within a closed economyIS-LMmodel, analyse the effects on income, the interest rate, consumption, and investment of the following:
A fall in the government budget deficit. Explain how your answer is affected by whether the reduced deficit comes about through a fall in government purchases or a rise in tax revenue.
A fall in the money supply.
This is a mock exam question and there are no answers provided, how would I approach this?
Cheers!
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