Assuming that the monetary authorities hold the money supply constant, explain why the decrease in government spending reduces output more in the Keynesian-cross model than in the IS-LM model.
Assuming that the monetary authorities hold the money supply constant, explain why the decrease in government spending reduces output more in the Keynesian-cross model than in the IS-LM model.
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter14: Money And The Economy
Section: Chapter Questions
Problem 1WNG
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Assuming that the monetary authorities hold the money supply constant, explain why
the decrease in government spending reduces output more in the Keynesian-cross
model than in the IS-LM model.
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