A government committed to long-run fiscal discipline (i.e. low and zero budget deficits) usually conducts contractionary fiscal
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A government committed to long-run fiscal discipline (i.e. low and zero budget deficits) usually conducts contractionary fiscal policy at some point to reduce the government deficit. If that action is interpreted as a commitment to long-run fiscal discipline, a) describe the effects on autonomous consumption and investment expenditure. b) describe the effects on the cost of borrowing by issuing bonds.
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