(Answered) Monetary and fiscal policy often changes at the same timea

Economics

Monetary and fiscal policy often changes at the same time.

a. Suppose the government wants to increase investment but keep output constant. Use the IS-LM model to show what policy mix of monetary and fiscal policy will achieve this goal.

b. In the early 1980s, the US government cut taxes and ran a deficit while the Fed pursued a tight monetary policy. What affect should this policy mix have?

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