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Economics

Impact of increase in government purchases using IS/LM/BP model.

Using the IS/LM/BP model, demonstrate the effect of each of the following changes. Assume that the economy is a small country with perfect capital mobility and a flexible exchange rate.

1) An increase in government purchases

2) An increase in the money supply

3) A fall in GDP in the rest of the world

4) An increase in the domestic price levelAn increase in tax rates

5) An increase in the domestic price level

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M921563

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