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How and why is the effectiveness of monetary policy dependent on the elasticity of the IS curve?

Generally, does the basic Keynesian formula multiplier (regardless of the model) tend to overstate, understate, or depict accurately the impact of fiscal stimulus packages relative to income (and thus employment)? Why? <---must explain why.

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Microeconomics, Economics

Category:- Microeconomics
Reference No.:- M91236069

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