Contractionary policies are designed to slow the economy and reduce inflation by decreasing aggregate demand and aggregate
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Contractionary policies are designed to slow the economy and reduce inflation by decreasing aggregate demand and aggregate output. Explain why contractionary fiscal policy and contractionary monetary policy have opposite effects on the interest rate despite having the same goal of decreasing aggregate demand and aggregate output. Illustrate your answer with graphs of the money market.
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Contractionary fiscal policy is a decrease in governmen...View the full answer
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Related Book For 
Principles of Macroeconomics
ISBN: 978-0134078809
12th edition
Authors: Karl E. Case, Ray C. Fair, Sharon E. Oster
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