Question: Problem 2: (20 points) Fiscal Policy is more effective when the LM curve is relatively at. 1. State whether the above statement is True or

Problem 2: (20 points) \"Fiscal Policy is more effective when the LM curve is relatively at." 1. State whether the above statement is \"True" or \"False\". (2 points) 2. Explain your answer by graphing the IS-LM model in an extreme case which can demonstrate if this statement is true or false. Use your graph to show how a scal policy can affect the market in this extreme case, explain. What is the name of this theory in regards of monetary policy? (18 points)
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