Question: In the following IS-LM figure, start from an initial equilibrium at point B. Suppose the central bank is fixing the exchange rate. An austerity package,

In the following IS-LM figure, start from an initial equilibrium at point B. Suppose the central bank is fixing the exchange rate. An austerity package, involving cuts in government expenditures, would result a new equilibrium at . . . M, EM. N H R J . . D D B K

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