Assume that money demand is highly insensitive to the, Ask an Expert

Economics

Assume that money demand is highly insensitive to the interest rate. Explain what the effects are on interest and income of an increase in government expenditure (G). Which component(s) of aggregate demand are crowded out (i.e., reduced)? Use an IS-LM diagram to support your answer.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M92198708

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